Engrossments
Introduction		Posted on 02/16/2023
1st Engrossment		Posted on 04/20/2023
2nd Engrossment		Posted on 04/24/2023
3rd Engrossment		Posted on 04/28/2023
4th Engrossment		Posted on 05/22/2023

Unofficial Engrossments
1st Unofficial Engrossment		Posted on 05/03/2023

Conference Committee Reports
CCR-HF1938A		Posted on 05/20/2023

Delete everything after the enacting clause and insert:

"ARTICLE 1

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2022, section 41B.0391, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Agricultural assets" means agricultural land, livestock, facilities, buildings, and
machinery used for farming in Minnesota.

(1) is a resident of Minnesota;

(2) is seeking entry, or has entered within the last ten years, into farming;

(3) intends to farm land located within the state borders of Minnesota;

(4) new text begin except as provided in subdivision 2, paragraph (f), new text end is not and whose spouse is not a
family member of the owner of the agricultural assets from whom the beginning farmer is
seeking to purchase or rent agricultural assets;

(5) new text begin except as provided in subdivision 2, paragraph (f), new text end is not and whose spouse is not a
family member of a partner, member, shareholder, or trustee of the owner of agricultural
assets from whom the beginning farmer is seeking to purchase or rent agricultural assets;
and

(6) meets the following eligibility requirements as determined by the authority:

(i) has a net worth that does not exceed the limit provided under section 41B.03,
subdivision 3, paragraph (a), clause (2);

(ii) provides the majority of the day-to-day physical labor and management of the farm;

(iii) has, by the judgment of the authority, adequate farming experience or demonstrates
knowledge in the type of farming for which the beginning farmer seeks assistance from the
authority;

(iv) demonstrates to the authority a profit potential by submitting projected earnings
statements;

(v) asserts to the satisfaction of the authority that farming will be a significant source
of income for the beginning farmer;

(vi) is enrolled in or has completed within ten years of their first year of farming a
financial management program approved by the authority or the commissioner of agriculture;

(vii) agrees to notify the authority if the beginning farmer no longer meets the eligibility
requirements within the three-year certification period, in which case the beginning farmer
is no longer eligible for credits under this section; and

(viii) has other qualifications as specified by the authority.

The authority may waive the requirement in item (vi) if the participant requests a waiver
and has a four-year degree in an agricultural program or related field, reasonable agricultural
job-related experience, or certification as an adult farm management instructor.

new text begin (d) "Emerging farmer" means an emerging farmer within the meaning of section 17.055,
subdivision 1.
new text end

deleted text begin (d)deleted text end new text begin (e)new text end "Family member" means a family member within the meaning of the Internal
Revenue Code, section 267(c)(4).

deleted text begin (e)deleted text end new text begin (f)new text end "Farm product" means plants and animals useful to humans and includes, but is
not limited to, forage and sod crops, oilseeds, grain and feed crops, dairy and dairy products,
poultry and poultry products, livestock, fruits, and vegetables.

deleted text begin (f)deleted text end new text begin (g)new text end "Farming" means the active use, management, and operation of real and personal
property for the production of a farm product.

deleted text begin (g)deleted text end new text begin (h)new text end "Owner of agricultural assets" means an individual, trust, or pass-through entity
that is the owner in fee of agricultural land or has legal title to any other agricultural asset.
Owner of agricultural assets does not mean an equipment dealer, livestock dealer defined
in section 17A.03, subdivision 7, or comparable entity that is engaged in the business of
selling agricultural assets for profit and that is not engaged in farming as its primary business
activity. An owner of agricultural assets approved and certified by the authority under
subdivision 4 must notify the authority if the owner no longer meets the definition in this
paragraph within the three year certification period and is then no longer eligible for credits
under this section.

deleted text begin (h)deleted text end new text begin (i)new text end "Resident" has the meaning given in section 290.01, subdivision 7.

deleted text begin (i)deleted text end new text begin (j)new text end "Share rent agreement" means a rental agreement in which the principal
consideration given to the owner of agricultural assets is a predetermined portion of the
production of farm products produced from the rented agricultural assets and which provides
for sharing production costs or risk of loss, or both.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 2.

Minnesota Statutes 2022, section 41B.0391, subdivision 2, is amended to read:

Subd. 2.

Tax credit for owners of agricultural assets.

(a) An owner of agricultural
assets may take a credit against the tax due under chapter 290 for the sale or rental of
agricultural assets to a beginning farmer in the amount allocated by the authority under
subdivision 4. An owner of agricultural assets is eligible for allocation of a credit equal to:

(1) deleted text begin fivedeleted text end new text begin eightnew text end percent of the lesser of the sale price or the fair market value of the
agricultural asset, up to a maximum of deleted text begin $32,000deleted text end new text begin $50,000new text end ;

(2) ten percent of the gross rental income in each of the first, second, and third years of
a rental agreement, up to a maximum of $7,000 per year; or

(3) 15 percent of the cash equivalent of the gross rental income in each of the first,
second, and third years of a share rent agreement, up to a maximum of $10,000 per year.

(b) A qualifying rental agreement includes cash rent of agricultural assets or a share rent
agreement. The agricultural asset must be rented at prevailing community rates as determined
by the authority.

(c) The credit may be claimed only after approval and certification by the authority, and
is limited to the amount stated on the certificate issued under subdivision 4. An owner of
agricultural assets must apply to the authority for certification and allocation of a credit, in
a form and manner prescribed by the authority.

(d) An owner of agricultural assets or beginning farmer may terminate a rental agreement,
including a share rent agreement, for reasonable cause upon approval of the authority. If a
rental agreement is terminated without the fault of the owner of agricultural assets, the tax
credits shall not be retroactively disallowed. In determining reasonable cause, the authority
must look at which party was at fault in the termination of the agreement. If the authority
determines the owner of agricultural assets did not have reasonable cause, the owner of
agricultural assets must repay all credits received as a result of the rental agreement to the
commissioner of revenue. The repayment is additional income tax for the taxable year in
which the authority makes its decision or when a final adjudication under subdivision 5,
paragraph (a), is made, whichever is later.

(e) The credit is limited to the liability for tax as computed under chapter 290 for the
taxable year. If the amount of the credit determined under this section for any taxable year
exceeds this limitation, the excess is a beginning farmer incentive credit carryover according
to section 290.06, subdivision 37.

new text begin (f) For purposes of the credit for the sale of agricultural land only, the family member
definitional exclusions in subdivision 1, paragraph (c), clauses (4) and (5), do not apply.
For a sale to a family member to qualify for the credit, the sales price of the agricultural
land must equal or exceed the assessed value of the land as of the date of the sale. For
purposes of this paragraph, "sale to a family member" means a sale to a beginning farmer
in which the beginning farmer or the beginning farmer's spouse is a family member of:
new text end

new text begin (1) the owner of the agricultural land; or
new text end

new text begin (2) a partner, member, shareholder, or trustee of the owner of the agricultural land.
new text end

new text begin (g) For a sale to an emerging farmer, the credit rate under paragraph (a), clause (1), is
twelve percent rather than eight percent.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 3.

Minnesota Statutes 2022, section 41B.0391, subdivision 4, is amended to read:

Subd. 4.

Authority duties.

(a) The authority shall:

(1) approve and certify or recertify beginning farmers as eligible for the program under
this section;

(2) approve and certify or recertify owners of agricultural assets as eligible for the tax
credit under subdivision 2 subject to the allocation limits in paragraph (c);

(3) provide necessary and reasonable assistance and support to beginning farmers for
qualification and participation in financial management programs approved by the authority;

(4) refer beginning farmers to agencies and organizations that may provide additional
pertinent information and assistance; and

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information
with the commissioner of revenue to the extent necessary to administer provisions under
this subdivision and section 290.06, subdivisions 37 and 38. The Rural Finance Authority
must annually notify the commissioner of revenue of approval and certification or
recertification of beginning farmers and owners of agricultural assets under this section.
For credits under subdivision 2, the notification must include the amount of credit approved
by the authority and stated on the credit certificate.

(b) The certification of a beginning farmer or an owner of agricultural assets under this
section is valid for the year of the certification and the two following years, after which
time the beginning farmer or owner of agricultural assets must apply to the authority for
recertification.

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority
must not allocate more than deleted text begin $5,000,000 for taxable years beginning after December 31,
2017, and before January 1, 2019, and must not allocate more than $6,000,000 for taxable
years beginning after December 31, 2018deleted text end new text begin $6,500,000 for taxable years beginning after
December 31, 2022, and before January 1, 2024, and $4,000,000 for taxable years beginning
after December 31, 2023new text end . The authority must allocate credits on a first-come, first-served
basis beginning on January 1 of each year, except that recertifications for the second and
third years of credits under subdivision 2, paragraph (a), clauses (1) and (2), have first
priority. Anynew text begin amount authorized but not allocated for taxable years ending before January
1, 2023, is canceled and is not allocated for future taxable years. For taxable years beginning
after December 31, 2022, anynew text end amount authorized but not allocated in any taxable year does
not cancel and is added to the allocation for the next taxable year.new text begin For each taxable year,
50 percent of newly allocated credits must be allocated to emerging farmers. Any portion
of a taxable year's newly allocated credits that is reserved for emerging farmers that is not
allocated by September 30 of the taxable year is available for allocation to other credit
allocations beginning on October 1.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 4.

Minnesota Statutes 2022, section 41B.0391, subdivision 6, is amended to read:

Subd. 6.

Report to legislature.

(a) No later than February 1, deleted text begin 2022deleted text end new text begin 2024new text end , the Rural
Finance Authority, in consultation with the commissioner of revenue, must provide a report
to the chairs and ranking minority members of the legislative committees having jurisdiction
over agriculture, economic development, rural development, and taxes, in compliance with
sections 3.195 and 3.197, on the beginning farmer tax credits under this section issued in
tax years beginning after December 31, 2017, and before January 1, deleted text begin 2022deleted text end new text begin 2024new text end .

(b) The report must include background information on beginning farmers in Minnesota
and any other information the commissioner and authority find relevant to evaluating the
effect of the credits on increasing opportunities for and the number of beginning farmers.

(1) the number and amount of credits issued under each clause;

(2) the geographic distribution of credits issued under each clause;

(3) the type of agricultural assets for which credits were issued under clause (1);

(4) the number and geographic distribution of beginning farmers whose purchase or
rental of assets resulted in credits for the seller or owner of the asset;

(5) the number and amount of credits disallowed under subdivision 2, paragraph (d);

(6) data on the number of beginning farmers by geographic region in calendar years
2017 through deleted text begin 2021deleted text end new text begin 2023, including:
new text end

new text begin (i) the number of beginning farmers by race and ethnicity, as those terms are applied in
the 2020 United States Census; and
new text end

new text begin (ii) to the extent available, the number of beginning farmers who are emerging farmersnew text end ;
and

(7) the number and amount of credit applications that exceeded the allocation available
in each year.

(d) For credits issued under subdivision 3, the report must include:

(1) the number and amount of credits issued;

(2) the geographic distribution of credits;

(3) a listing and description of each approved financial management program for which
credits were issued; and

(4) a description of the approval procedure for financial management programs not on
the list maintained by the authority, as provided in subdivision 3, paragraph (a).

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2022, section 41B.0391, subdivision 7, is amended to read:

Subd. 7.

Sunset.

This section expires for taxable years beginning after December 31,
deleted text begin 2023deleted text end new text begin 2030new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2022, section 116J.8737, subdivision 5, is amended to read:

Subd. 5.

Credit allowed.

(a) A qualified investor or qualified fund is eligible for a credit
equal to 25 percent of the qualified investment in a qualified small business. Investments
made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The
commissioner must not allocate to qualified investors or qualified funds more than the dollar
amount in credits allowed for the taxable years listed in paragraph (i). For each taxable year,
50 percent must be allocated to credits for qualified investments in qualified greater
Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified
small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for
qualified investments in greater Minnesota businesses and minority-owned, women-owned,
or veteran-owned qualified small businesses in Minnesota that is not allocated by September
30 of the taxable year is available for allocation to other credit applications beginning on
October 1. Any portion of a taxable year's credits that is not allocated by the commissioner
does not cancel and may be carried forward to subsequent taxable years until all credits
have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married couples
filing joint returns the maximum is $250,000, and for all other filers the maximum is
$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an
individual qualified investor or as an investor in a qualified fund if, at the time the investment
is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the
investor's family, owns, controls, or holds the power to vote 20 percent or more of the
outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.

(d) Applications for tax credits must be made available on the department's website by
November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.
Tax credits must be allocated to qualified investors or qualified funds in the order that the
tax credit request applications are filed with the department. The commissioner must approve
or reject tax credit request applications within 15 days of receiving the application. The
investment specified in the application must be made within 60 days of the allocation of
the credits. If the investment is not made within 60 days, the credit allocation is canceled
and available for reallocation. A qualified investor or qualified fund that fails to invest as
specified in the application, within 60 days of allocation of the credits, must notify the
commissioner of the failure to invest within five business days of the expiration of the
60-day investment period.

(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate amount
of credit allocation claims exceeds the aggregate limit of credits under this section or the
lesser amount of credits that remain unallocated on that day, then the credits must be allocated
among the qualified investors or qualified funds who filed on that day on a pro rata basis
with respect to the amounts claimed. The pro rata allocation for any one qualified investor
or qualified fund is the product obtained by multiplying a fraction, the numerator of which
is the amount of the credit allocation claim filed on behalf of a qualified investor and the
denominator of which is the total of all credit allocation claims filed on behalf of all
applicants on that day, by the amount of credits that remain unallocated on that day for the
taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the qualified
fund at the time of the qualified investment. After receiving notification that the investment
was made, the commissioner must issue credit certificates for the taxable year in which the
investment was made to the qualified investor or, for an investment made by a qualified
fund, to each qualified investor who is an investor in the fund. The certificate must state
that the credit is subject to revocation if the qualified investor or qualified fund does not
hold the investment in the qualified small business for at least three years, consisting of the
calendar year in which the investment was made and the two following years. The three-year
holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before
the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end
of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.

(i) The credit allowed under this subdivision is effective as follows:

(1) $10,000,000 for taxable years beginning after December 31, 2020, and before January
1, 2022; and

(2) $5,000,000 for taxable years beginning after December 31, 2021, and before January
1, deleted text begin 2023deleted text end new text begin 2025new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 7.

Minnesota Statutes 2022, section 116J.8737, subdivision 12, is amended to read:

Subd. 12.

Sunset.

This section expires for taxable years beginning after December 31,
deleted text begin 2022deleted text end new text begin 2024new text end , except that reporting requirements under subdivision 6 and revocation of credits
under subdivision 7 remain in effect through deleted text begin 2024deleted text end new text begin 2026new text end for qualified investors and qualified
funds, and through deleted text begin 2026deleted text end new text begin 2028new text end for qualified small businesses, reporting requirements under
subdivision 9 remain in effect through deleted text begin 2022deleted text end new text begin 2024new text end , and the appropriation in subdivision 11
remains in effect through deleted text begin 2026deleted text end new text begin 2028new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

Minnesota Statutes 2022, section 116U.27, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have
the meanings given.

(b) "Allocation certificate" means a certificate issued by the commissioner to a taxpayer
upon receipt new text begin and approval new text end of an initial application for a credit for a project that has not yet
been completed.

(d) "Commissioner" means the commissioner of employment and economic development.

(e) "Credit certificate" means a certificate issued by the commissioner upon deleted text begin submissiondeleted text end new text begin
receipt and approvalnew text end of the cost verification report in subdivision 4, paragraph (e).

(f) "Eligible production costs" means eligible production costs as defined in section
116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to
the production of a film project in Minnesota.

(g) "Film" has the meaning given in section 116U.26, paragraph (b), clause (2).

(h) "Project" means a film:

(1) that includes the promotion of Minnesota;

(2) for which the taxpayer has expended at least $1,000,000 in deleted text begin the taxable yeardeleted text end new text begin any
consecutive 12-month period beginning after expenditures are first paid in Minnesotanew text end for
eligible production costs; and

(3) to the extent practicable, that employs Minnesota residents.

(i) "Promotion of Minnesota" or "promotion" means visible display of a static or animated
logo, approved by the commissioner and lasting approximately five seconds, that promotes
Minnesota within its presentation in the end credits before the below-the-line crew crawl
for the life of the project.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 9.

Minnesota Statutes 2022, section 116U.27, subdivision 4, is amended to read:

Subd. 4.

Applications; allocations.

(a) To qualify for a credit under this section, a
taxpayer must submit to the commissioner an application for a credit in the form prescribed
by the commissioner, in consultation with the commissioner of revenue.

(b) Upon approving an application for a credit that meets the requirements of this section,
the commissioner shall issue allocation certificates that:

(1) verify eligibility for the credit;

(2) state the amount of credit anticipated for the eligible project, with the credit amount
up to 25 percent of eligible project costs; and

(3) state the taxable year in which the credit is allocated.

The commissioner must consult with the Minnesota Film and TV Board prior to issuing an
allocation certificate.

(c) The commissioner must not issue allocation certificates for more than deleted text begin $4,950,000deleted text end new text begin
$24,950,000new text end of credits each year. If the entire amount is not allocated in that taxable year,
any remaining amount is available for allocation for the four following taxable years until
the entire allocation has been made. The commissioner must not award any credits for
taxable years beginning after December 31, deleted text begin 2024deleted text end new text begin 2030new text end , and any unallocated amounts cancel
on that date.

(d) The commissioner must allocate credits on a first-come, first-served basis.

(e) Upon completion of a project, the taxpayer shall submit to the commissioner a report
prepared by an independent certified public accountant licensed in the state of Minnesota
to verify the amount of eligible production costs related to the project. The report must be
prepared in accordance with generally accepted accounting principles. Upon receipt and
deleted text begin reviewdeleted text end new text begin approvalnew text end of the cost verification reportnew text begin and other documents required by the
commissionernew text end , the commissioner shall determine the final amount of eligible production
costs and issue a credit certificate to the taxpayer. The credit may not exceed the anticipated
credit amount on the allocation certificate. If the credit is less than the anticipated amount
on the allocation credit, the difference is returned to the amount available for allocation
under paragraph (c). To claim the credit under section 290.06, subdivision 39, or 297I.20,
subdivision 4, a taxpayer must include a copy of the credit certificate as part of the taxpayer's
return.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for allocation certificates issued after
December 31, 2022.
new text end

Sec. 10.

Minnesota Statutes 2022, section 116U.27, subdivision 7, is amended to read:

Subd. 7.

Expiration.

Subdivisions 1 to 5 expire January 1, deleted text begin 2025deleted text end new text begin 2031new text end , for taxable years
beginning after December 31, deleted text begin 2024deleted text end new text begin 2030new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for allocation certificates issued after
December 31, 2022.
new text end

Sec. 11.

new text begin [181.141] SEXUAL HARASSMENT OR ABUSE SETTLEMENT; PAYMENT
AS SEVERANCE OR WAGES PROHIBITED.
new text end

new text begin In a sexual harassment or abuse settlement between an employer and an employee, when
there is a financial settlement provided, the financial settlement cannot be provided as wages
or severance pay to the employee regardless of whether the settlement includes a
nondisclosure agreement.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12.

Minnesota Statutes 2022, section 289A.08, subdivision 7, as amended by Laws
2023, chapter 1, section 2, is amended to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.

(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the
income from the partnership, other electing partnerships, and other qualifying entities
electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
that the electing partner has other Minnesota source income, the inclusion of the income
and tax liability for that partner under this provision will not constitute a return to satisfy
the requirements of subdivision 1. The tax paid for the individual as part of the composite
return is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.

(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.

(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.

(j) For the purposes of this subdivision, "income" deleted text begin means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in: (1) section
290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable
to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction
allowed under section 290.0132, subdivision 9, is only allowed on the composite tax
computation to the extent the electing partner would have been allowed the subtraction.deleted text end new text begin has
the meaning given in section 290.01, subdivision 19, paragraph (h).
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 13.

Minnesota Statutes 2022, section 289A.08, subdivision 7, as amended by Laws
2023, chapter 1, section 2, is amended to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in: (1) section
290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable
to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction
allowed under section 290.0132, subdivision 9, is only allowed on the composite tax
computation to the extent the electing partner would have been allowed the subtraction.

new text begin EFFECTIVE DATE.new text end

new text begin Effective for taxable years beginning after December 31, 2023.
new text end

Sec. 14.

Minnesota Statutes 2022, section 289A.08, subdivision 7a, as amended by Laws
2023, chapter 1, section 3, is amended to read:

Subd. 7a.

Pass-through entity tax.

(a) For the purposes of this subdivision, the following
terms have the meanings given:

(1) "income" has the meaning given in deleted text begin subdivision 7, paragraph (j), modified by the
addition provided in section 290.0131, subdivision 5, and the subtraction provided in section
290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a
qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The
income of both a resident and nonresident qualifying owner is allocated and assigned to
this state as provided for nonresident partners and shareholders under sections 290.17,
290.191, and 290.20deleted text end new text begin section 290.01, subdivision 19, paragraph (i). The income of a resident
qualifying owner of a qualifying entity that is a partnership or limited liability company
taxed as a partnership under the Internal Revenue Code is not subject to allocation outside
this state as provided for resident individuals under section 290.17, subdivision 1, paragraph
(a). The income of a nonresident qualifying owner of a qualifying entity and the income of
a resident qualifying owner of a qualifying entity that is an S corporation, including a
qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal
Revenue Code, are allocated and assigned to this state as provided for nonresident partners
and shareholders under sections 290.17, 290.191, and 290.20new text end ;

(2) "qualifying entity" means a partnership, limited liability companynew text begin taxed as a
partnership or S corporationnew text end , or S corporation including a qualified subchapter S subsidiary
organized under section 1361(b)(3)(B) of the Internal Revenue Codenew text begin that has at least one
qualifying ownernew text end . Qualifying entity does not include a deleted text begin partnership, limited liability company,
or corporation that has a partnership, limited liability company other than a disregarded
entity, or corporation as a partner, member, or shareholderdeleted text end new text begin publicly traded partnership, as
defined in section 7704 of the Internal Revenue Codenew text end ; and

(3) "qualifying owner" means:

(i) a resident or nonresident individual or estate that is a partner, member, or shareholder
of a qualifying entity; deleted text begin or
deleted text end

(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an
S corporationdeleted text begin .deleted text end new text begin ; or
new text end

new text begin (iii) a disregarded entity that has a qualifying owner as its single owner.
new text end

(b) For taxable years beginning after December 31, 2020, deleted text begin in which the taxes of a
qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code,deleted text end a
qualifying entity may elect to file a return and pay the pass-through entity tax imposed under
paragraph (c). The election:

(1) must be made on or before the due date or extended due date of the qualifying entity's
pass-through entity tax return;

new text begin (2) must exclude partners, members, shareholders, or owners who are not qualifying
owners;
new text end

deleted text begin (2)deleted text end new text begin (3)new text end may only be made by qualifying owners who collectively hold more than deleted text begin adeleted text end 50
percent new text begin of the new text end ownership deleted text begin interestdeleted text end new text begin interestsnew text end in the qualifying entitynew text begin held by qualifying ownersnew text end ;

deleted text begin (3)deleted text end new text begin (4)new text end is binding on all qualifying owners who have an ownership interest in the
qualifying entity; and

deleted text begin (4)deleted text end new text begin (5)new text end once made is irrevocable for the taxable year.

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a
qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount
of the qualifying owner's income multiplied by the highest tax rate for individuals under
section 290.06, subdivision 2c.new text begin The computation of a qualifying owner's net investment
income tax liability must be computed under section 290.033.new text end When making this
determination:

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed;
and

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

(e) The amount of each credit and deduction used to determine a qualifying owner's tax
liability under paragraph (d) must also be used to determine that qualifying owner's income
tax liability under chapter 290.

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated
tax if the qualifying owner's tax liability would exceed the requirements set forth in section
289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's
tax liability as determined under paragraph (d) is, however, satisfied when the qualifying
entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated
tax.

(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the
treatment of distributions, is determined as if the election to pay the pass-through entity tax
under paragraph (b) is not made.

(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a
pass-through entity tax return must be treated as a composite return and a qualifying entity
filing a pass-through entity tax return must be treated as a partnership filing a composite
return.

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity
tax under this subdivision.

(j) If a nonresident qualifying owner of a qualifying entity making the election to file
and pay the tax under this subdivision has no other Minnesota source income, filing of the
pass-through entity tax return is a return for purposes of subdivision 1, provided that the
nonresident qualifying owner must not have any Minnesota source income other than the
income from the qualifying entity, other electing qualifying entities, and other partnerships
electing to file a composite return under subdivision 7. If it is determined that the nonresident
qualifying owner has other Minnesota source income, the inclusion of the income and tax
liability for that owner under this provision will not constitute a return to satisfy the
requirements of subdivision 1. The tax paid for the qualifying owner as part of the
pass-through entity tax return is allowed as a payment of the tax by the qualifying owner
on the date on which the pass-through entity tax return payment was made.

(k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision
40, a qualifying entity cannot receive a refund for tax paid under this subdivision for any
amounts claimed under that section by the qualifying owners. Once a credit is claimed under
section 290.06, subdivision 40, any refund must be claimed in conjunction with a return
filed by the qualifying owner.

new text begin (l) This section expires at the same time and on the same terms as section 164(b)(6)(B)
of the Internal Revenue Code, except that the expiration of this section does not affect the
commissioner's authority to audit or power of examination and assessments for credits
claimed under this section.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin (a) Paragraphs (a), (b), and (l) are effective for taxable years
beginning after December 31, 2022.
new text end

new text begin (b) Paragraph (d) is effective for taxable years beginning after December 31, 2023.
new text end

Sec. 15.

Minnesota Statutes 2022, section 289A.382, subdivision 2, is amended to read:

Subd. 2.

Reporting and payment requirements for partnerships and tiered
partners.

(a) Except for when an audited partnership makes the election in subdivision 3,
and except for negative federal adjustments required under federal law taken into account
by the partnership in the partnership return for the adjustment or other year, all final federal
adjustments of an audited partnership must comply with paragraph (b) and each direct
partner of the audited partnership, other than a tiered partner, must comply with paragraph
(c).

(b) No later than 90 days after the final determination date, the audited partnership must:

(1) file a completed federal adjustments report, including all partner-level information
required under section 289A.12, subdivision 3, with the commissioner;

(2) notify each of its direct partners of their distributive share of the final federal
adjustments;

(3) file an amended composite report for all direct partners who were included in a
composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the
additional amount that would have been due had the federal adjustments been reported
properly as required; deleted text begin and
deleted text end

(4) file amended withholding reports for all direct partners who were or should have
been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed
year, and pay the additional amount that would have been due had the federal adjustments
been reported properly as requireddeleted text begin .deleted text end new text begin ; and
new text end

new text begin (5) file an amended pass-through entity tax report for all direct partners who were
included in a pass-through entity tax return under section 289A.08, subdivision 7a, in the
reviewed year, and pay the additional amount that would have been due had the federal
adjustments been reported properly as required.
new text end

(c) No later than 180 days after the final determination date, each direct partner, other
than a tiered partner, that is subject to a tax administered under this chapter, other than the
sales tax, must:

(1) file a federal adjustments report reporting their distributive share of the adjustments
reported to them under paragraph (b), clause (2); and

(2) pay any additional amount of tax due as if the final federal adjustment had been
properly reported, plus any penalty and interest due under this chapter, and less any credit
for related amounts paid or withheld and remitted on behalf of the direct partner under
paragraph (b), clauses (3) and (4).

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020.
new text end

Sec. 16.

Minnesota Statutes 2022, section 290.01, subdivision 19, is amended to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section 290.03, and a
corporation taxable under section 290.02, the term "net income" means the federal taxable
income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
the date named in this subdivision, incorporating the federal effective dates of changes to
the Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in sections 290.0131 to 290.0136.

(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(c) In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through December 31, 2018, applies
for taxable years beginning after December 31, 1996, except the sections of federal law in
section 290.0111 shall also apply.

(g) Except as otherwise provided, references to the Internal Revenue Code in this
subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
determining net income for the applicable year.

new text begin (h) In the case of a partnership electing to file a composite return under section 289A.08,
subdivision 7, "net income" means the partner's share of federal adjusted gross income from
the partnership modified by the additions provided in section 290.0131, subdivisions 8 to
10, 16, and 17, and the subtractions provided in: (1) section 290.0132, subdivisions 9, 27,
and 28, to the extent the amount is assignable or allocable to Minnesota under section 290.17;
and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132,
subdivision 9, is only allowed on the composite tax computation to the extent the electing
partner would have been allowed the subtraction.
new text end

new text begin (i) In the case of a qualifying entity electing to pay the pass-through entity tax under
section 289A.08, subdivision 7a, "net income" means the qualifying owner's share of federal
adjusted gross income from the qualifying entity modified by the additions provided in
section 290.0131, subdivisions 5, 8 to 10, 16, and 17, and the subtractions provided in: (1)
section 290.0132, subdivisions 3, 9, 27, and 28, to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The
subtraction allowed under section 290.0132, subdivision 9, is only allowed on the
pass-through entity tax computation to the extent the qualifying owners would have been
allowed the subtraction. The income of both a resident and nonresident qualifying owner
is allocated and assigned to this state as provided for nonresident partners and shareholders
under sections 290.17, 290.191, and 290.20.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 17.

Minnesota Statutes 2022, section 290.01, subdivision 21a, is amended to read:

Subd. 21a.

Adjusted gross income; federal adjusted gross income.

new text begin (a) new text end The terms
"adjusted gross income" and "federal adjusted gross income" mean adjusted gross income,
as defined in section 62 of the Internal Revenue Code, as amended through the date named
in subdivision 19, paragraph (f), incorporating the federal effective date of changes to the
Internal Revenue Code and any elections made by the taxpayer under the Internal Revenue
Code in determining federal adjusted gross income for federal income tax purposes.

new text begin (b) When computing federal adjusted gross income for purposes of credits and deductions,
a taxpayer must calculate their federal adjusted gross income without any deduction for the
specified income tax payments as defined in Internal Revenue Code Notice 2020-75. The
taxpayer must provide detailed substantiation to support the computation.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 18.

Minnesota Statutes 2022, section 290.0122, subdivision 2, is amended to read:

Subd. 2.

Deductions limited; inflation adjustment.

(a) The itemized deductions of a
taxpayer with adjusted gross income deleted text begin in excess of the applicable amountdeleted text end new text begin over $220,650new text end are
reduced by the lesser of:

(1) three percent of the excess of the taxpayer's deleted text begin federaldeleted text end adjusted gross income over deleted text begin the
applicable amountdeleted text end new text begin $220,650 but not over $304,970; plus ten percent of the taxpayer's
adjusted gross income over $304,970new text end ; or

(2) 80 percent of the amount of the taxpayer's itemized deductions.

deleted text begin (b) "Applicable amount" means $194,650, or $97,325
deleted text end

new text begin (b) Notwithstanding paragraph (a), for a taxpayer with adjusted gross income over
$1,000,000, a taxpayer's itemized deductions are reduced by 80 percent.
new text end

new text begin (c)new text end For a married individual filing a separate returnnew text begin , the reduction under paragraph (a)
must be calculated using one-half of the adjusted gross income amounts specified in that
paragraphnew text end .

deleted text begin (c)deleted text end new text begin (d)new text end For the purposes of this subdivision, "itemized deductions" means the itemized
deductions otherwise allowable to the taxpayer under subdivision 1, except itemized
deductions excludes:

(1) the portion of the deduction for interest under subdivision 5 that represents investment
interest;

(2) the deduction for medical expenses under subdivision 6; and

(3) the deduction for losses under subdivision 8.

deleted text begin (d)deleted text end new text begin (e)new text end For taxable years beginning after December 31, deleted text begin 2019deleted text end new text begin 2023new text end , the commissioner
must adjust for inflation the deleted text begin applicabledeleted text end new text begin adjusted gross incomenew text end amounts under deleted text begin paragraphdeleted text end new text begin
paragraphs (a) andnew text end (b) as provided in section 270C.22. The statutory year is taxable year
deleted text begin 2019deleted text end new text begin 2023new text end . The amounts as adjusted must be rounded down to the nearest $50 amount. The
threshold amount for married individuals filing separate returns must be one-half of the
adjusted amount for married individuals filing joint returns.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 19.

Minnesota Statutes 2022, section 290.0123, subdivision 5, is amended to read:

Subd. 5.

Deduction limited.

(a) The standard deduction of a taxpayer with adjusted
gross income deleted text begin in excess of the applicable amountdeleted text end new text begin over $220,650new text end is reduced by the lesser of:

(2) 80 percent of the standard deduction otherwise allowable under this section.

new text begin (b) Notwithstanding paragraph (a), for a taxpayer with adjusted gross income over
$1,000,000, the standard deduction is reduced by 80 percent of the standard deduction
otherwise allowable under this section.
new text end

deleted text begin (b) "Applicable amount" means $194,650, or $97,325deleted text end new text begin (c)new text end For a married individual filing
a separate returnnew text begin , the reduction under paragraph (a) must be calculated using one-half of
the adjusted gross income amounts specified in that paragraphnew text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 20.

Minnesota Statutes 2022, section 290.0123, subdivision 6, is amended to read:

Subd. 6.

Inflation adjustment.

For taxable years beginning after December 31, deleted text begin 2019deleted text end new text begin
2023new text end , the commissioner must adjust for inflation the standard deduction amounts in
subdivision 1, the additional amounts in subdivision 2, the amounts in subdivision 3, and
the deleted text begin applicabledeleted text end new text begin adjusted gross incomenew text end amounts in subdivision 5 as provided in section
270C.22. The statutory year is taxable year deleted text begin 2019deleted text end new text begin 2023new text end . The amounts as adjusted must be
rounded down to the nearest $50 amount. The standard deduction amount for married
individuals filing separate returns is one-half of the adjusted amount for married individuals
filing joint returns.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 21.

Minnesota Statutes 2022, section 290.0131, subdivision 17, is amended to read:

Subd. 17.

Foreign-derived intangible income.

To the extent deducted from net income,
the amount of deleted text begin foreign-derived intangibledeleted text end income deducted under section 250 of the Internal
Revenue Code for the taxable year is an addition.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after
December, 31, 2022.
new text end

Sec. 22.

Minnesota Statutes 2022, section 290.0132, subdivision 4, is amended to read:

Subd. 4.

Education expenses.

(a) Subject to the limits in paragraph (b), the following
amounts paid to others for each qualifying child are a subtraction:

(1) education-related expenses; plus

(2) tuition and fees paid to attend a school described in section 290.0674, deleted text begin subdivision 1deleted text end new text begin
subdivision 1a, paragraph (b)new text end , clause (4), that are not included in education-related expenses;
less

(3) any amount used to claim the credit under section 290.0674.

(b) The maximum subtraction allowed under this subdivision is:

(1) $1,625 for each qualifying child in kindergarten through grade 6; and

(2) $2,500 for each qualifying child in grades 7 through 12.

(c) The definitions in section 290.0674, deleted text begin subdivision 1deleted text end new text begin subdivision 1anew text end , apply to this
subdivision.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 23.

Minnesota Statutes 2022, section 290.0132, subdivision 24, is amended to read:

Subd. 24.

deleted text begin Discharge of indebtedness; education loansdeleted text end new text begin Student loan dischargesnew text end .

(a)
The deleted text begin amount equal to the discharge of indebtedness of thedeleted text end new text begin qualified student loan discharge
of anew text end taxpayer is a subtraction deleted text begin if:deleted text end new text begin .
new text end

deleted text begin (1) the indebtedness discharged is a qualified education loan; and
deleted text end

deleted text begin (2) the indebtedness was discharged under section 136A.1791, or following the taxpayer's
completion of an income-driven repayment plan.
deleted text end

deleted text begin (b) For the purposes of this subdivision, "qualified education loan" has the meaning
given in section 221 of the Internal Revenue Code.
deleted text end

deleted text begin (c) For purposes of this subdivision, "income-driven repayment plan" means a payment
plan established by the United States Department of Education that sets monthly student
loan payments based on income and family size under United States Code, title 20, section
1087e, or similar authority and specifically includes, but is not limited to:
deleted text end

new text begin (b) For the purposes of this subdivision, "qualified student loan discharge" means a
discharge of indebtedness eligible for the exclusion from gross income under section 9675
of Public Law 117-2. A discharge of indebtedness that occurred after December 31, 2025,
but otherwise qualifies for the exclusion under that section is a qualified student loan
discharge.
new text end

new text begin (c) "Qualified student loan discharge" includes but is not limited to a discharge of
indebtedness under:
new text end

(1) the income-based repayment plan under United States Code, title 20, section 1098e;

(2) the income contingent repayment plan established under United States Code, title
20, section 1087e, subsection (e); deleted text begin and
deleted text end

(3) the PAYE program or REPAYE program established by the Department of Education
under administrative regulationsnew text begin ; and
new text end

new text begin (4) section 136A.1791new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 24.

Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:

Subd. 26.

Social Security benefits.

(a) A deleted text begin portion of taxable Social Security benefits is
allowed as a subtraction. Thedeleted text end new text begin taxpayer is allowed anew text end subtraction deleted text begin equalsdeleted text end new text begin equal to the greater
of the simplified subtraction allowed under paragraph (b) or the alternate subtraction
determined under paragraph (e).
new text end

new text begin (b) A taxpayer's simplified subtraction equals the amount of taxable social security
benefits, as reduced under paragraphs (c) and (d).
new text end

new text begin (c) For a taxpayer other than a married taxpayer filing a separate return with adjusted
gross income above the phaseout threshold, the simplified subtraction is reduced by ten
percent for each $4,000 of adjusted gross income, or fraction thereof, in excess of the
phaseout threshold. The phaseout threshold equals:
new text end

new text begin (1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
new text end

new text begin (2) $78,000 for a single or head of household taxpayer; and
new text end

new text begin (3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
filing a joint return.
new text end

new text begin (d) For a married taxpayer filing a separate return, the simplified subtraction is reduced
by ten percent for each $2,000 of adjusted gross income, or fraction thereof, in excess of
the phaseout threshold.
new text end

new text begin (e) A taxpayer's alternate subtraction equals new text end the lesser of taxable Social Security benefits
or a maximum subtraction subject to the limits under paragraphs deleted text begin (b), (c), and (d)deleted text end new text begin (f), (g),
and (h)new text end .

deleted text begin (b)deleted text end new text begin (f)new text end For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction new text begin under paragraph (c) new text end equals deleted text begin $5,150deleted text end new text begin $5,840new text end . The maximum subtraction is reduced
by 20 percent of provisional income over deleted text begin $78,180deleted text end new text begin $88,630new text end . In no case is the subtraction
less than zero.

deleted text begin (c)deleted text end new text begin (g)new text end For single or head-of-household taxpayers, the maximum subtraction new text begin under
paragraph (c) new text end equals deleted text begin $4,020deleted text end new text begin $4,560new text end . The maximum subtraction is reduced by 20 percent of
provisional income over deleted text begin $61,080deleted text end new text begin $69,250new text end . In no case is the subtraction less than zero.

deleted text begin (d)deleted text end new text begin (h)new text end For married taxpayers filing separate returns, the maximum subtraction new text begin under
paragraph (c) new text end equals one-half the maximum subtraction for joint returns under paragraph
deleted text begin (b)deleted text end new text begin (d)new text end . The maximum subtraction is reduced by 20 percent of provisional income over
one-half the threshold amount specified in paragraph deleted text begin (b)deleted text end new text begin (d)new text end . In no case is the subtraction
less than zero.

deleted text begin (e)deleted text end new text begin (i)new text end For purposes of this subdivision, "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the taxable Social Security benefits received during the taxable year, and "Social Security
benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.

deleted text begin (f)deleted text end new text begin (j)new text end The commissioner shall adjust the deleted text begin maximum subtraction anddeleted text end new text begin phaseout new text end threshold
amounts in paragraphs deleted text begin (b) todeleted text end new text begin (c) and new text end (d) as provided in section 270C.22. The statutory year
is taxable year deleted text begin 2019deleted text end new text begin 2023new text end . The maximum subtraction and threshold amounts as adjusted
must be rounded to the nearest $10 amount. If the amount ends in $5, the amount is rounded
up to the nearest $10 amount.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 25.

Minnesota Statutes 2022, section 290.0132, subdivision 27, is amended to read:

Subd. 27.

Deferred foreign income.

The amount of deferred foreign income deleted text begin recognized
because of section 965 of the Internal Revenue Codedeleted text end new text begin under section 965 of the Internal
Revenue Code included in federal adjusted gross income or federal taxable income,new text end is a
subtraction.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 26.

Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 34.new text end

new text begin Qualified retirement benefits.new text end

new text begin (a) The amount of qualified public pension
income is a subtraction. The subtraction in this section is limited to:
new text end

new text begin (1) $25,000 for a married taxpayer filing a joint return or surviving spouse; or
new text end

new text begin (2) $12,500 for all other filers.
new text end

new text begin (b) For a taxpayer with adjusted gross income above the phaseout threshold, the
subtraction is reduced by ten percent for each $2,000 of adjusted gross income, or fraction
thereof, in excess of the threshold. The phaseout threshold equals:
new text end

new text begin (1) $100,000 for a married taxpayer filing a joint return or surviving spouse;
new text end

new text begin (2) $78,000 for a single or head of household taxpayer; or
new text end

new text begin (3) for a married taxpayer filing a separate return, half the amount for a married taxpayer
filing a joint return.
new text end

new text begin (c) For the purposes of this section, "qualified public pension income" means any amount
received:
new text end

new text begin (1) by a former basic member or the survivor of a former basic member, as an annuity
or survivor benefit, from a pension plan governed by chapter 353, 353E, 354, or 354A,
provided that the annuity or benefit is based on service for which the member or survivor
is not also receiving Social Security benefits;
new text end

new text begin (2) as an annuity or survivor benefit from the legislators plan under chapter 3A, the State
Patrol retirement plan under chapter 352B, or the public employees police and fire plan
under sections 353.63 to 353.666, provided that the annuity or benefit is based on service
for which the member or survivor is not also receiving Social Security benefits;
new text end

new text begin (3) from any retirement system administered by the federal government that is based on
service for which the recipient or the recipient's survivor is not also receiving Social Security
benefits; or
new text end

new text begin (4) from a public retirement system of or created by another state or any of its political
subdivisions, or the District of Columbia, if the income tax laws of the other state or district
permit a similar deduction or exemption or a reciprocal deduction or exemption of a
retirement or pension benefit received from a public retirement system of or created by this
state or any political subdivision of this state.
new text end

new text begin (d) The commissioner must annually adjust the subtraction limits in paragraph (a) and
the phaseout thresholds in paragraph (b), as provided in section 270C.22. The statutory year
is taxable year 2023.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 27.

Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 35.new text end

new text begin Damages for sexual harassment or abuse.new text end

new text begin The amount of damages received
under a sexual harassment or abuse claim that is not excluded from gross income under
section 104(a)(2) of the Internal Revenue Code because the damages are not received on
account of personal physical injuries or physical sickness is a subtraction.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 28.

Minnesota Statutes 2022, section 290.0133, subdivision 6, is amended to read:

Subd. 6.

Special deductions.

The amount of any special deductions under sections 241
to 247, new text begin and new text end 250, deleted text begin and 965deleted text end of the Internal Revenue Code is an addition.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 29.

Minnesota Statutes 2022, section 290.0134, subdivision 18, is amended to read:

Subd. 18.

Deferred foreign income.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 30.

new text begin [290.033] NET INVESTMENT INCOME TAX.
new text end

new text begin (a) For purposes of this section, "net investment income" has the meaning given in
section 1411(c) of the Internal Revenue Code, excluding the net gain attributable to the
disposition of property classified as class 2a under section 273.13, subdivision 23.
new text end

new text begin (b) In addition to the tax computed under section 290.06, subdivision 2c, a tax is imposed
on the net investment income of individuals, estates, and trusts in excess of $1,000,000 at
a rate of one percent.
new text end

new text begin (c) For an individual who is not a Minnesota resident for the entire taxable year, the tax
under this subdivision must be calculated as if the individual is a Minnesota resident for the
entire year, and that amount must be multiplied by a fraction in which:
new text end

new text begin (1) the numerator is net investment income allocable under section 290.17 to Minnesota;
and
new text end

new text begin (2) the denominator is the total amount of net investment income for the taxable year.
new text end

new text begin (d) For an estate or trust, the tax on net investment income must be computed by
multiplying the net investment income tax liability by a fraction, the numerator of which is
the amount of the estate or trust's net investment income allocated to the state pursuant to
the provisions of sections 290.17, 290.191, and 290.20, and the denominator of which is
the taxpayer's total net investment income.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end

Sec. 31.

Minnesota Statutes 2022, section 290.06, subdivision 23, is amended to read:

Subd. 23.

Refund of contributions to political parties and candidates.

(a) A taxpayer
may claim a refund equal to the amount of the taxpayer's contributions made in the calendar
year to candidates and to a political party. The maximum refund for an individual must not
exceed deleted text begin $50deleted text end new text begin $75new text end and for a married couple, filing jointly, must not exceed deleted text begin $100deleted text end new text begin $150new text end . A
refund of a contribution is allowed only if the taxpayer files a form required by the
commissioner and attaches to the form a copy of an official refund receipt form issued by
the candidate or party and signed by the candidate, the treasurer of the candidate's principal
campaign committee, or the chair or treasurer of the party unit, after the contribution was
received. The receipt forms must be numbered, and the data on the receipt that are not public
must be made available to the campaign finance and public disclosure board upon its request.
A claim must be filed with the commissioner no sooner than January 1 of the calendar year
in which the contribution was made and no later than April 15 of the calendar year following
the calendar year in which the contribution was made. A taxpayer may file only one claim
per calendar year. Amounts paid by the commissioner after June 15 of the calendar year
following the calendar year in which the contribution was made must include interest at the
rate specified in section 270C.405.

(b) No refund is allowed under this subdivision for a contribution to a candidate unless
the candidate:

(1) has signed an agreement to limit campaign expenditures as provided in section
10A.322;

(2) is seeking an office for which voluntary spending limits are specified in section
10A.25; and

(3) has designated a principal campaign committee.

This subdivision does not limit the campaign expenditures of a candidate who does not
sign an agreement but accepts a contribution for which the contributor improperly claims
a refund.

(c) For purposes of this subdivision, "political party" means a major political party as
defined in section 200.02, subdivision 7, or a minor political party qualifying for inclusion
on the income tax or property tax refund form under section 10A.31, subdivision 3a.

A "major party" or "minor party" includes the aggregate of that party's organization
within each house of the legislature, the state party organization, and the party organization
within congressional districts, counties, legislative districts, municipalities, and precincts.

"Candidate" means a candidate as defined in section 10A.01, subdivision 10, except a
candidate for judicial office.

"Contribution" means a gift of money.

(d) The commissioner shall make copies of the form available to the public and candidates
upon request.

(e) The following data collected or maintained by the commissioner under this subdivision
are private: the identities of individuals claiming a refund, the identities of candidates to
whom those individuals have made contributions, and the amount of each contribution.

(f) The commissioner shall report to the campaign finance and public disclosure board
by each August 1 a summary showing the total number and aggregate amount of political
contribution refunds made on behalf of each candidate and each political party. These data
are public.

(g) The amount necessary to pay claims for the refund provided in this section is
appropriated from the general fund to the commissioner of revenue.

(h) For a taxpayer who files a claim for refund via the Internet or other electronic means,
the commissioner may accept the number on the official receipt as documentation that a
contribution was made rather than the actual receipt as required by paragraph (a).

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective January 1, 2024, and applies to refunds
for contributions made in calendar year 2024 and thereafter.
new text end

Sec. 32.

Minnesota Statutes 2022, section 290.06, is amended by adding a subdivision to
read:

new text begin Subd. 23a.new text end

new text begin Pass-through entity tax paid to another state.new text end

new text begin (a) A credit is allowed against
the tax imposed on a qualifying entity under section 289A.08, subdivision 7a, for
pass-through entity tax paid to another state. The credit under this subdivision is allowed
as a credit for taxes paid to another state under subdivision 22, paragraph (a) and may only
be claimed by a qualifying owner. The credit allowed under this subdivision must be claimed
in a manner prescribed by the commissioner.
new text end

new text begin (b) This section expires at the same time and on the same terms as section 164(b)(6)(B)
of the Internal Revenue Code, except that the expiration of this section does not affect the
commissioner's authority to audit or power of examination and assessments for credits
claimed under this section.
new text end

new text begin (c) As used in this subdivision, the following terms have the meanings given:
new text end

new text begin (1) "income" has the meaning provided in section 290.01, subdivision 19, paragraph (i);
new text end

new text begin (2) "pass-through entity tax" means an entity-level tax imposed on the income of a
partnership, limited liability corporation, or S corporation;
new text end

new text begin (3) "qualifying entity" has the meaning provided in section 289A.08, subdivision 7a,
paragraph (a); and
new text end

new text begin (4) "qualifying owner" has the meaning provided in section 289A.08, subdivision 7a,
paragraph (b).
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 33.

Minnesota Statutes 2022, section 290.06, subdivision 39, is amended to read:

Subd. 39.

Film production credit.

(a) A taxpayer, including a taxpayer to whom a credit
has been assigned under section 116U.27, subdivision 3, may claim a credit against the tax
imposed by this chapter equal to the amount certified on a credit certificate under section
116U.27, subject to the limitations in this subdivision.

(b) The credit is limited to the liability for tax, as computed under this chapter, for the
taxable year. If the amount of the credit determined under this subdivision for any taxable
year exceeds this limitation, the excess is a film production credit carryover to each of the
five succeeding taxable years. The entire amount of the excess unused credit for the taxable
year is carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit that may be added under this paragraph must not exceed the taxpayer's liability
for tax, less any film production credit for the taxable year.

(c) Credits allowed to a partnership, a limited liability company taxed as a partnership,
or an S corporation are passed through to the partners, members, shareholders, or owners,
respectively, pro rata to each based on the partner's, member's, shareholder's, or owner's
share of the entity's assets, or as specially allocated in the organizational documents or any
other executed agreement, as of the last day of the taxable year.

(d) Notwithstanding the approval and certification by the commissioner of employment
and economic development under section 116U.27, the commissioner may utilize any audit
and examination powers under chapter 270C or 289A to the extent necessary to verify that
the taxpayer is eligible for the credit and to assess the amount of any improperly claimed
credit. The commissioner may only assess the original recipient of the credit certificate for
the amount of improperly claimed credits. The commissioner may not assess a credit
certificate assignee for any amount of improperly claimed credits, and an assignee's claim
for credit is not affected by the commissioner's assessment of improperly claimed credits
against the assignor.

(e) This subdivision expires January 1, deleted text begin 2025deleted text end new text begin 2031new text end , for taxable years beginning after
December 31, deleted text begin 2024deleted text end new text begin 2030new text end , except that the expiration of this section does not affect the
commissioner of revenue's authority to audit or power of examination and assessment for
credits claimed under this subdivision.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 34.

new text begin [290.0661] MINNESOTA CHILD TAX CREDIT.
new text end

new text begin Subdivision 1.new text end

new text begin Definitions.new text end

new text begin For the purposes of this section, "qualifying child" has the
meaning given in section 32(c) of the Internal Revenue Code, except:
new text end

new text begin (1) excluding individuals who attained the age of 18 or greater in the taxable year; and
new text end

new text begin (2) section 32(m) of the Internal Revenue Code does not apply.
new text end

new text begin Subd. 2.new text end

new text begin Credit allowed.new text end

new text begin A taxpayer who is a resident of Minnesota is allowed a credit
against the tax imposed by this chapter, as provided in this section. To be eligible for the
credit under this section, the taxpayer must be eligible for the credit under section 290.0671,
except a taxpayer whose earned income was insufficient to claim a credit under that section
but who otherwise qualifies to claim the credit is eligible.
new text end

new text begin Subd. 3.new text end

new text begin Credit amount.new text end

new text begin The credit under this section equals $1,750 per qualifying
child.
new text end

new text begin Subd. 4.new text end

new text begin Phaseout.new text end

new text begin The credits under this section and section 290.0671 are phased down
jointly. The combined amount of the credits is reduced by 12 percent of earned income or
adjusted gross income, whichever is greater, in excess of the phaseout threshold. The
phaseout threshold equals:
new text end

new text begin (1) $35,000 for a married taxpayer filing a joint return; or
new text end

new text begin (2) $29,500 for all other filers.
new text end

new text begin Subd. 5.new text end

new text begin Part-year residents.new text end

new text begin For a part-year resident, the combined amounts of the
credit under this section and section 290.0671, after the phaseout in subdivision 4, must be
allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph
(e).
new text end

new text begin Subd. 6.new text end

new text begin Credit refundable; appropriation.new text end

new text begin If the amount of credit which the claimant
is eligible to receive under this section exceeds the claimant's tax liability under this chapter,
the commissioner shall refund the excess to the claimant. An amount sufficient to pay the
refunds required by this section is appropriated to the commissioner from the general fund.
new text end

new text begin Subd. 7.new text end

new text begin Inflation adjustment.new text end

new text begin (a) For taxable years beginning after December 31,
2025, the commissioner of revenue must annually adjust for inflation the credit amount in
subdivision 3 as provided in section 270C.22. The adjusted amounts must be rounded to
the nearest $60. The statutory year is taxable year 2025.
new text end

new text begin (b) For taxable years beginning after December 31, 2023, the commissioner of revenue
must annually adjust for inflation the phaseout thresholds in subdivision 4, as provided in
section 270C.22. The statutory year is taxable year 2023.
new text end

new text begin Subd. 8.new text end

new text begin Advance payment of credits.new text end

new text begin (a) The commissioner of revenue may establish
a process to allow taxpayers to elect to receive one or more advance payments of the credit
under this section. The amount of advance payments must be based on the taxpayer and
commissioner's estimate of the amount of credits for which the taxpayer would be eligible
in the taxable year beginning in the calendar year in which the payments were made. The
commissioner must not distribute advance payments to a taxpayer who does not elect to
receive advance payments.
new text end

new text begin (b) The amount of a taxpayer's credit under this section for the taxable year is reduced
by the amount of advance payments received by the taxpayer in the calendar year during
which the taxable year began. If a taxpayer's advance payments exceeded the credit the
taxpayer was eligible to receive for the taxable year, the taxpayer's liability for tax is increased
by the difference between the amount of advance payments received and the credit amount.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 35.

Minnesota Statutes 2022, section 290.067, is amended to read:

290.067 DEPENDENT CARE CREDIT.

Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the tax
due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of section
21 of the Internal Revenue Code except that in determining whether the child qualified as
a dependent, income received as a Minnesota family investment program grant or allowance
to or on behalf of the child must not be taken into account in determining whether the child
received more than half of the child's support from the taxpayer.

(b) If a child who has not attained the age of six years at the close of the taxable year is
cared for at a licensed family day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child is 16 months old or younger
at the close of the taxable year, the amount of expenses deemed to have been paid equals
the maximum limit for one qualified individual under section 21(c) and (d) of the Internal
Revenue Code. If the child is older than 16 months of age but has not attained the age of
six years at the close of the taxable year, the amount of expenses deemed to have been paid
equals the amount the licensee would charge for the care of a child of the same age for the
same number of hours of care.

(1) has a child who has not attained the age of one year at the close of the taxable year;new text begin
and
new text end

deleted text begin (2) files a joint tax return for the taxable year; and
deleted text end

deleted text begin (3)deleted text end new text begin (2)new text end does not participate in a dependent care assistance program as defined in section
129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid
for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of
(i) the deleted text begin combineddeleted text end earned income of the deleted text begin coupledeleted text end new text begin taxpayernew text end or (ii) the amount of the maximum
limit for one qualified individual under section 21(c) and (d) of the Internal Revenue Code
will be deemed to be the employment related expense paid for that child. The earned income
limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any employment-related
expenses have been paid.

(d) If the taxpayer is not required and does not file a federal individual income tax return
for the tax year, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included on
the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue
Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name
and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.

(e) In the case of a nonresident, part-year resident, deleted text begin or a person who has earned income
not subject to tax under this chapter including earned income excluded pursuant to section
290.0132, subdivision 10,deleted text end the credit determined under section 21 of the Internal Revenue
Code must be allocated based on the ratio by which the earned income of the claimant and
the claimant's spouse from Minnesota sources bears to the total earned income of the claimant
and the claimant's spouse.

(f) For residents of Minnesota, the subtractions for military pay under section 290.0132,
subdivisions 11 and 12, are not considered "earned income not subject to tax under this
chapter."

(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."

(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is
equal to the lesser of the credit otherwise calculated under this subdivision, or the amount
equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for
taxpayers with one qualified individual, or $1,200 minus five percent of federal adjusted
gross income in excess of $52,230 for taxpayers with two or more qualified individuals,
but in no case is the credit less than zero.

Subd. 2b.

Inflation adjustment.

The commissioner shall annually adjust the dollar
amount of the income threshold at which the maximum credit begins to be reduced under
subdivision 1 as provided in section 270C.22. The statutory year is taxable year 2019.

Subd. 3.

Credit to be refundable.

If the amount of credit which a claimant would be
eligible to receive pursuant to this subdivision exceeds the claimant's tax liability under
chapter 290, the excess amount of the credit shall be refunded to the claimant by the
commissioner of revenue.new text begin The amount needed to pay the refunds required by this section
is appropriated to the commissioner from the general fund.
new text end

Subd. 4.

Right to file claim.

The right to file a claim under this section shall be personal
to the claimant and shall not survive death, but such right may be exercised on behalf of a
claimant by the claimant's legal guardian or attorney-in-fact. When a claimant dies after
having filed a timely claim the amount thereof shall be disbursed to another member of the
household as determined by the commissioner of revenue. If the claimant was the only
member of a household, the claim may be paid to the claimant's personal representative,
but if neither is appointed and qualified within two years of the filing of the claim, the
amount of the claim shall escheat to the state.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 36.

Minnesota Statutes 2022, section 290.0671, as amended by Laws 2023, chapter
1, section 16, is amended to read:

290.0671 MINNESOTA WORKING FAMILY CREDIT.

Subdivision 1.

Credit allowed.

(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code, except that:

(1) a taxpayer with no qualifying children who has attained the age of 19, but not attained
age 65 before the close of the taxable year and is otherwise eligible for a credit under section
32 of the Internal Revenue Code may also receive a credit; deleted text begin and
deleted text end

(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted
gross income exceeds the income limitation under section 32 of the Internal Revenue Codenew text begin ;
and
new text end

new text begin (3) section 32(m) of the Internal Revenue Code does not applynew text end .

new text begin (b) A taxpayer's working family credit equals four percent of the first $8,750 of earned
income.
new text end

new text begin (c) The credit under this section is increased by:
new text end

new text begin (1) $925 for a taxpayer with one qualifying older child;
new text end

new text begin (2) $2,100 for a taxpayer with two qualifying older children; or
new text end

new text begin (3) $2,500 for a taxpayer with three or more qualifying older children.
new text end

new text begin (d) The credit under this section is phased out jointly with the credit under section
290.0661, subdivision 4. For a taxpayer with one or more qualifying older children who
did not qualify for the credit under section 290.0661, the phaseout rate equals nine percent.
new text end

deleted text begin (b) For individuals with no qualifying children, the credit equals 3.9 percent of the first
$7,150 of earned income. The credit is reduced by 2.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
deleted text end

deleted text begin (c) For individuals with one qualifying child, the credit equals 9.35 percent of the first
$11,950 of earned income. The credit is reduced by 6.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
deleted text end

deleted text begin (d) For individuals with two qualifying children, the credit equals 11 percent of the first
$19,600 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.
deleted text end

deleted text begin (e) For individuals with three or more qualifying children, the credit equals 12.5 percent
of the first $20,000 of earned income. The credit is reduced by 10.5 percent of earned income
or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in
no case is the credit less than zero.
deleted text end

deleted text begin (f) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).
deleted text end

deleted text begin (g)deleted text end new text begin (e)new text end For a person who was a resident for the entire tax year and has earned income
not subject to tax under this chapter, deleted text begin including income excluded under section 290.0132,
subdivision 10,deleted text end the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.

deleted text begin (h) For the purposes of this section, the phaseout threshold equals:
deleted text end

deleted text begin (1) $14,570 for married taxpayers filing joint returns with no qualifying children;
deleted text end

deleted text begin (2) $8,730 for all other taxpayers with no qualifying children;
deleted text end

deleted text begin (3) $28,610 for married taxpayers filing joint returns with one qualifying child;
deleted text end

deleted text begin (4) $22,770 for all other taxpayers with one qualifying child;
deleted text end

deleted text begin (5) $32,840 for married taxpayers filing joint returns with two qualifying children;
deleted text end

deleted text begin (6) $27,000 for all other taxpayers with two qualifying children;
deleted text end

deleted text begin (7) $33,140 for married taxpayers filing joint returns with three or more qualifying
children; and
deleted text end

deleted text begin (8) $27,300 for all other taxpayers with three or more qualifying children.
deleted text end

deleted text begin (i) The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.
deleted text end

Subd. 1a.

Definitions.

For purposes of this section, deleted text begin the term "qualifying child " has the
meaning givendeleted text end new text begin "qualifying older child" means a qualifying child, as definednew text end in section 32(c)
of the Internal Revenue Codedeleted text begin ."earned income of the lesser-earning spouse" has the meaning
given in section 290.0675, subdivision 1, paragraph (d)deleted text end new text begin , that attained at least the age of 18
in the taxable year. For the purposes of determining a qualifying older child, section 32(m)
of the Internal Revenue Code does not applynew text end .

Subd. 2.

Credit name.

The credit allowed by this section shall be known as the
"Minnesota working family credit."

Subd. 4.

Credit refundable.

If the amount of credit which the claimant is eligible to
receive under this section exceeds the claimant's tax liability under this chapter, the
commissioner shall refund the excess to the claimant.

deleted text begin Subd. 5.deleted text end

deleted text begin Calculation assistance.deleted text end

deleted text begin Upon request of the individual and submission of the
necessary information, in the form prescribed by the commissioner, the Department of
Revenue shall calculate the credit on behalf of the individual.
deleted text end

Subd. 6.

Appropriation.

An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.

Subd. 7.

Inflation adjustment.

The commissioner shall annually adjust the earned
income amounts used to calculate the credit and the deleted text begin phase-out thresholdsdeleted text end new text begin qualifying older
child amounts new text end in subdivision 1 as provided in section 270C.22. The statutory year is taxable
year deleted text begin 2019deleted text end new text begin 2023new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 37.

Minnesota Statutes 2022, section 290.0674, is amended to read:

290.0674 MINNESOTA EDUCATION CREDIT.

Subdivision 1.

Credit alloweddeleted text begin ; definitionsdeleted text end .

An individual is allowed a credit against
the tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
education-related expenses for a qualifying child in kindergarten through grade 12.

new text begin Subd. 1a.new text end

new text begin Definitions.new text end

new text begin (a) new text end For purposes of this section,new text begin the following terms have the
meanings given them.
new text end

new text begin (b)new text end "Education-related expenses" means:

(1) new text begin qualifying instructional new text end fees or tuition deleted text begin for instruction by an instructor under section
120A.22, subdivision 10, clause (1), (2), (3), (4), or (5), or a member of the Minnesota
Music Teachers Association, and who is not a lineal ancestor or sibling of the dependent
for instruction outside the regular school day or school year, including tutoring, driver's
education offered as part of school curriculum, regardless of whether it is taken from a
public or private entity or summer camps, in grade or age appropriate curricula that
supplement curricula and instruction available during the regular school year, that assists a
dependent to improve knowledge of core curriculum areas or to expand knowledge and
skills under the required academic standards under section 120B.021, subdivision 1, and
the world languages standards under section 120B.022, subdivision 1, and that do not include
the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worshipdeleted text end ;

(2) expenses for textbooks, including books and other instructional materials and
equipment purchased or leased for use in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public elementary and secondary schools
in this state. "Textbooks" does not include instructional books and materials used in the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship, nor does it include books or materials for extracurricular
activities including sporting events, musical or dramatic events, speech activities, driver's
education, or similar programs;

(3) a maximum expense of $200 per family for personal computer hardware, excluding
single purpose processors, and educational software that assists a dependent to improve
knowledge of core curriculum areas or to expand knowledge and skills under the required
academic standards under section 120B.021, subdivision 1, and the elective standard under
section 120B.022, subdivision 1, clause (2), purchased for use in the taxpayer's home and
not used in a trade or business regardless of whether the computer is required by the
dependent's school; and

(4) the amount paid to others for transportation of a qualifying child attending an
elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
attendance laws, which is not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363A. Amounts under this clause exclude any
expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle.

new text begin (c) "Qualified instructor" means an individual who is not a lineal ancestor or sibling of
the dependent and who is:
new text end

new text begin (1) an instructor under section 120A.22, subdivision 10, clause (1), (2), (3), (4), or (5);
or
new text end

new text begin (2) a member of the Minnesota Music Teachers Association.
new text end

deleted text begin For purposes of this section,deleted text end new text begin (d)new text end "Qualifying child" has the meaning given in section
32(c)(3) of the Internal Revenue Code.

new text begin (e) "Qualifying instructional fees or tuition" means fees or tuition for instruction by a
qualified instructor outside the regular school day or school year, and that does not include
the teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship, including:
new text end

new text begin (1) driver's education offered as part of school curriculum, regardless of whether it is
taken from a public or private entity; or
new text end

new text begin (2) tutoring or summer camps that:
new text end

new text begin (i) are in grade or age appropriate curricula that supplement curricula and instruction
available during the regular school year;
new text end

new text begin (ii) assist a dependent to improve knowledge of core curriculum areas; or
new text end

new text begin (iii) expand knowledge and skills under:
new text end

new text begin (A) the required academic standards under section 120B.021, subdivision 1; and
new text end

new text begin (B) the world languages standards under section 120B.022, subdivision 1.
new text end

Subd. 2.

Limitations.

(a) For claimants with new text begin adjusted gross new text end income not greater than
deleted text begin $33,500deleted text end new text begin $70,000new text end , the maximum credit allowed for a family is deleted text begin $1,000deleted text end new text begin $1,500new text end multiplied by
the number of qualifying children in kindergarten through grade 12 in the family. The
maximum credit for families with one qualifying child in kindergarten through grade 12 is
reduced by $1 for each $4 of deleted text begin householddeleted text end new text begin adjusted grossnew text end income over deleted text begin $33,500deleted text end new text begin $70,000new text end , and
the maximum credit for families with two or more qualifying children in kindergarten
through grade 12 is reduced by $2 for each $4 of deleted text begin householddeleted text end new text begin adjusted grossnew text end income over
deleted text begin $33,500deleted text end new text begin $70,000new text end , but in no case is the credit less than zero.

(b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.

(c) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

deleted text begin Subd. 2a.deleted text end

deleted text begin Income.deleted text end

deleted text begin (a) For purposes of this section, "income" means the sum of the
following:
deleted text end

deleted text begin (1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code;
and
deleted text end

deleted text begin (2) the sum of the following amounts to the extent not included in clause (1):
deleted text end

deleted text begin (i) all nontaxable income;
deleted text end

deleted text begin (ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
carryover allowed under section 469(b) of the Internal Revenue Code;
deleted text end

deleted text begin (iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
solvent individual excluded from gross income under section 108(g) of the Internal Revenue
Code;
deleted text end

deleted text begin (iv) cash public assistance and relief;
deleted text end

deleted text begin (v) any pension or annuity (including railroad retirement benefits, all payments received
under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
which was not exclusively funded by the claimant or spouse, or which was funded exclusively
by the claimant or spouse and which funding payments were excluded from federal adjusted
gross income in the years when the payments were made;
deleted text end

deleted text begin (vi) interest received from the federal or a state government or any instrumentality or
political subdivision thereof;
deleted text end

deleted text begin (vii) workers' compensation;
deleted text end

deleted text begin (viii) nontaxable strike benefits;
deleted text end

deleted text begin (ix) the gross amounts of payments received in the nature of disability income or sick
pay as a result of accident, sickness, or other disability, whether funded through insurance
or otherwise;
deleted text end

deleted text begin (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
deleted text end

deleted text begin (xi) contributions made by the claimant to an individual retirement account, including
a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of
the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal
Revenue Code;
deleted text end

deleted text begin (xii) nontaxable scholarship or fellowship grants;
deleted text end

deleted text begin (xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
deleted text end

deleted text begin (xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
Code;
deleted text end

deleted text begin (xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; and
deleted text end

deleted text begin (xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.
deleted text end

deleted text begin In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.
deleted text end

deleted text begin (b) "Income" does not include:
deleted text end

deleted text begin (1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
deleted text end

deleted text begin (2) amounts of any pension or annuity that were exclusively funded by the claimant or
spouse if the funding payments were not excluded from federal adjusted gross income in
the years when the payments were made;
deleted text end

deleted text begin (3) surplus food or other relief in kind supplied by a governmental agency;
deleted text end

deleted text begin (4) relief granted under chapter 290A;
deleted text end

deleted text begin (5) child support payments received under a temporary or final decree of dissolution or
legal separation; and
deleted text end

deleted text begin (6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law 107-16.
deleted text end

Subd. 4.

Credit to be refundable.

If the amount of credit that the claimant is eligible
to receive under this section exceeds the claimant's tax liability under this chapter, the
commissioner shall refund the excess to the claimant.

Subd. 5.

Appropriation.

An amount sufficient to pay the refunds required by this section
is appropriated to the commissioner from the general fund.

new text begin Subd. 6.new text end

new text begin Inflation adjustment.new text end

new text begin The commissioner shall annually adjust the adjusted
gross income amounts in subdivision 2, as provided in section 270C.22. The statutory year
is taxable year 2023.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 38.

Minnesota Statutes 2022, section 290.0677, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed; current military service.

(a) An individual is allowed
a credit against the tax due under this chapter equal to $59 for each month or portion thereof
that the individual was in active military service in a designated area after September 11,
2001, and before January 1, 2009, while a Minnesota domiciliary.

(b) An individual is allowed a credit against the tax due under this chapter equal to $120
for each month or portion thereof that the individual was in active military service in a
designated area after December 31, 2008, while a Minnesota domiciliary.

(c) For active service performed after September 11, 2001, and before December 31,
2006, the individual may claim the credit in the taxable year beginning after December 31,
2005, and before January 1, 2007.

(d) For active service performed after December 31, 2006, the individual may claim the
credit for the deleted text begin taxabledeleted text end new text begin calendarnew text end year in which the active service was performed.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 39.

Minnesota Statutes 2022, section 290.0681, subdivision 10, is amended to read:

Subd. 10.

Sunset.

This section expires after fiscal year deleted text begin 2022deleted text end new text begin 2030new text end , except that the office's
authority to issue credit certificates under subdivision 4 based on allocation certificates that
were issued before fiscal year deleted text begin 2023deleted text end new text begin 2031new text end remains in effect through deleted text begin 2025deleted text end new text begin 2034new text end , and the
reporting requirements in subdivision 9 remain in effect through the year following the year
in which all allocation certificates have either been canceled or resulted in issuance of credit
certificates, or deleted text begin 2026deleted text end new text begin 2035new text end , whichever is earlier.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively from July 1, 2022.
new text end

Sec. 40.

new text begin [290.0694] CREDIT FOR SALES OF MANUFACTURED HOME PARKS
TO COOPERATIVES.
new text end

new text begin Subdivision 1.new text end

new text begin Definitions.new text end

new text begin (a) For purposes of this section, the following definitions
have the meanings given.
new text end

new text begin (b) "Qualified property" means a manufactured home park in Minnesota classified as
4c(5)(i) or 4c(5)(iii) under section 273.13, subdivision 25, paragraph (d).
new text end

new text begin (c) "Qualified seller" means a taxpayer, as defined under section 290.01, subdivision 6,
who sells qualified property to: (1) a corporation or association organized under chapter
308A or 308B, where each person who owns a share or shares in the corporation or
association would be entitled to occupy a lot within the qualified property after the sale; (2)
a charitable corporation, organized under the laws of Minnesota with no outstanding stock,
and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status, whose
members hold residential participation warrants entitling the members to occupy the units
in the manufactured home park; or (3) a nonprofit or a representative acting on behalf of
residents, as defined by section 327C.015, subdivision 13, who purchases the property on
behalf of residents who intend to form a corporation or association as described in clause
(1) or (2).
new text end

new text begin Subd. 2.new text end

new text begin Credit allowed; carryforward.new text end

new text begin (a) A qualified seller is allowed a credit against
the tax imposed under this chapter. The credit equals five percent of the amount of the sale
price of the qualified property.
new text end

new text begin (b) If the amount of the credit under this section exceeds the taxpayer's liability for tax
under this chapter, the excess is a credit carryover to each of the five succeeding taxable
years. The entire amount of the excess unused credit for the taxable year must be carried
first to the earliest of the taxable years to which the credit may be carried and then to each
successive year to which the credit may be carried. The amount of the unused credit that
may be added under this paragraph may not exceed the taxpayer's liability for tax, less any
credit for the current taxable year.
new text end

new text begin (c) For residents and part-year residents, the credit must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 3.new text end

new text begin Partnerships; multiple owners.new text end

new text begin Credits granted to a partnership, a limited
liability company taxed as a partnership, an S corporation, or multiple owners of property
are passed through to the partners, members, shareholders, or owners, respectively, pro rata
to each partner, member, shareholder, or owner based on their share of the entity's assets
or as specially allocated in their organizational documents or any other executed document,
as of the last day of the taxable year.
new text end

new text begin Subd. 4.new text end

new text begin Sunset.new text end

new text begin This section expires January 1, 2031, for taxable years beginning after
December 31, 2030.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 41.

new text begin [290.0695] SHORT LINE RAILROAD INFRASTRUCTURE
MODERNIZATION CREDIT.
new text end

new text begin Subdivision 1.new text end

new text begin Definitions.new text end

new text begin (a) For purpose of this section, the following terms have the
meanings given them.
new text end

new text begin (b) "Eligible taxpayer" means any railroad that is classified by the United States Surface
Transportation Board as a Class II or Class III railroad.
new text end

new text begin (c) "Eligible transferee" means any taxpayer subject to tax under this chapter or chapter
297I.
new text end

new text begin (d) "Qualified railroad reconstruction or replacement expenditures" means gross
expenditures in the taxable year for maintenance, reconstruction, or replacement of railroad
infrastructure, including track, roadbed, bridges, industrial leads and sidings, and track-related
structures owned or leased by a Class II or Class III railroad in Minnesota as of January 1,
2021. Qualified railroad reconstruction or replacement expenditures also includes new
construction of industrial leads, switches, spurs and sidings and extensions of existing sidings
in Minnesota by a Class II or Class III railroad.
new text end

new text begin Subd. 2.new text end

new text begin Credit allowed; limitation; carryover.new text end

new text begin (a) An eligible taxpayer is allowed a
credit against tax due under this chapter equal to 50 percent of eligible expenses, not to
exceed $3,000 per mile, multiplied by the number of miles of railroad track owned or leased
within the state by the eligible taxpayer for which the taxpayer made qualified railroad
reconstruction or replacement expenditures as of the close of the taxable year for which the
credit is claimed.
new text end

new text begin (b) If the amount of the credit determined under this section for any taxable year exceeds
the liability for tax under this chapter, the excess is a credit carryover to each of the five
succeeding taxable years. The entire amount of the excess unused credit for the taxable year
must be carried first to the earliest of the taxable years to which the credit may be carried
and then to each successive year to which the credit may be carried. The amount of the
unused credit that may be added under this paragraph must not exceed the taxpayer's liability
for tax less the credit for the taxable year.
new text end

new text begin (c) An eligible taxpayer claiming a credit under this section may not also claim the credit
under section 297I.20, subdivision 6, for the same qualified railroad reconstruction or
replacement expenditures.
new text end

new text begin Subd. 3.new text end

new text begin Transferability; written agreement required; credit certificate.new text end

new text begin (a) An
eligible taxpayer may transfer the credit allowed under this section by written agreement
to an eligible transferee. The amount of the transferred credit is limited to the unused,
remaining portion of the credit.
new text end

new text begin (b) The eligible taxpayer and the eligible transferee must jointly file a copy of the written
transfer agreement with the commissioner within 30 days of the transfer. The written
agreement must contain the name, address, and taxpayer identification number of the parties
to the transfer; the taxable year the eligible taxpayer incurred the qualified expenditures;
the amount of credit being transferred; and the taxable year or years for which the transferred
credit maybe claimed.
new text end

new text begin (c) The commissioner must issue a credit certificate to the transferee within 30 days of
the joint filing of a copy of the written transfer agreement with the commissioner.
new text end

new text begin (d) In the case of an audit or assessment, the transferee is liable for repayment of credits
claimed in excess of the allowed amount.
new text end

new text begin Subd. 4.new text end

new text begin Partnerships; multiple owners.new text end

new text begin Credits granted or transferred to a partnership,
a limited liability company taxed as a partnership, an S corporation, or multiple owners of
property are passed through to the partners, members, shareholders, or owners, respectively,
pro rata to each partner, member, shareholder, or owner based on their share of the entity's
assets or as specially allocated in their organizational documents or any other executed
agreement, as of the last day of the taxable year.
new text end

new text begin Subd. 5.new text end

new text begin Allocation for nonresidents and part-year residents.new text end

new text begin For a nonresident or
part-year resident, the credit determined under this section must be allocated based on the
percentage calculated under section 290.06, subdivision 2c, paragraph (e).
new text end

new text begin Subd. 6.new text end

new text begin Sunset.new text end

new text begin This section expires January 1, 2031, for taxable years beginning after
December 31, 2030.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 42.

Minnesota Statutes 2022, section 290.091, subdivision 2, as amended by Laws
2023, chapter 1, section 18, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(1)(D) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, deleted text begin anddeleted text end 31new text begin , 34, and 35new text end ;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 43.

Minnesota Statutes 2022, section 290.091, subdivision 2, as amended by Laws
2023, chapter 1, section 18, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(1)(D) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, and 31;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this sectionnew text begin , section 290.033new text end and section 290.032), reduced by the sum of the
nonrefundable credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2023.
new text end

Sec. 44.

Minnesota Statutes 2022, section 290.095, subdivision 2, is amended to read:

Subd. 2.

Defined and limited.

(a) The term "net operating loss" as used in this section
shall mean a net operating loss as defined in section 172(c) of the Internal Revenue Code,
with the modifications specified in subdivision 4. The deductions provided in section 290.21
cannot be used in the determination of a net operating loss.

(b) The term "net operating loss deduction" as used in this section means the aggregate
of the net operating loss carryovers to the taxable year, computed in accordance with
subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating to
the carryback of net operating losses, do not apply.

(c) The amount of net operating loss deduction under this section must not exceed deleted text begin 80deleted text end new text begin
70new text end percent of taxable net income in a single taxable year.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 45.

Minnesota Statutes 2022, section 290.21, subdivision 4, is amended to read:

Subd. 4.

Dividends received from another corporation.

(a)(1) deleted text begin Eightydeleted text end new text begin Fiftynew text end percent of
dividends received by a corporation during the taxable year from another corporation, in
which the recipient owns 20 percent or more of the stock, by vote and value, not including
stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate
stock with respect to which dividends are paid does not constitute the stock in trade of the
taxpayer or would not be included in the inventory of the taxpayer, or does not constitute
property held by the taxpayer primarily for sale to customers in the ordinary course of the
taxpayer's trade or business, or when the trade or business of the taxpayer does not consist
principally of the holding of the stocks and the collection of the income and gains therefrom;
and

(2)(i) the remaining deleted text begin 20deleted text end new text begin 50new text end percent of dividends if the dividends received are the stock
in an affiliated company transferred in an overall plan of reorganization and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989;

(ii) the remaining deleted text begin 20deleted text end new text begin 50new text end percent of dividends if the dividends are received from a
corporation which is subject to tax under section 290.36 and which is a member of an
affiliated group of corporations as defined by the Internal Revenue Code and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989, or is deducted under an election under section 243(b)
of the Internal Revenue Code; or

(iii) the remaining deleted text begin 20deleted text end new text begin 50new text end percent of the dividends if the dividends are received from a
property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal Revenue Code and
either: (A) the dividend is eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
under an election under section 243(b) of the Internal Revenue Code.

(b) deleted text begin Seventydeleted text end new text begin Fortynew text end percent of dividends received by a corporation during the taxable year
from another corporation in which the recipient owns less than 20 percent of the stock, by
vote or value, not including stock described in section 1504(a)(4) of the Internal Revenue
Code when the corporate stock with respect to which dividends are paid does not constitute
the stock in trade of the taxpayer, or does not constitute property held by the taxpayer
primarily for sale to customers in the ordinary course of the taxpayer's trade or business, or
when the trade or business of the taxpayer does not consist principally of the holding of the
stocks and the collection of income and gain therefrom.

(c) The dividend deduction provided in this subdivision shall be allowed only with
respect to dividends that are included in a corporation's Minnesota taxable net income for
the taxable year.

The dividend deduction provided in this subdivision does not apply to a dividend from
a corporation which, for the taxable year of the corporation in which the distribution is made
or for the next preceding taxable year of the corporation, is a corporation exempt from tax
under section 501 of the Internal Revenue Code.

The dividend deduction provided in this subdivision does not apply to a dividend received
from a real estate investment trust as defined in section 856 of the Internal Revenue Code.

The dividend deduction provided in this subdivision applies to the amount of regulated
investment company dividends only to the extent determined under section 854(b) of the
Internal Revenue Code.

The dividend deduction provided in this subdivision shall not be allowed with respect
to any dividend for which a deduction is not allowed under the provisions of section 246(c)
or 246A of the Internal Revenue Code.

(d) If dividends received by a corporation that does not have nexus with Minnesota under
the provisions of Public Law 86-272 are included as income on the return of an affiliated
corporation permitted or required to file a combined report under section 290.17, subdivision
4, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to
whether the trade or business of the corporation consists principally of the holding of stocks
and the collection of income and gains therefrom shall be made with reference to the trade
or business of the affiliated corporation having a nexus with Minnesota.

(e) The deduction provided by this subdivision does not apply if the dividends are paid
by a FSC as defined in section 922 of the Internal Revenue Code.

(f) If one or more of the members of the unitary group whose income is included on the
combined report received a dividend, the deduction under this subdivision for each member
of the unitary business required to file a return under this chapter is the product of: (1) 100
percent of the dividends received by members of the group; (2) the percentage allowed
pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income
apportionable to this state for the taxable year under section 290.191 or 290.20.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 46.

Minnesota Statutes 2022, section 290.21, subdivision 9, is amended to read:

Subd. 9.

Controlled foreign corporations.

The net income of a deleted text begin domesticdeleted text end corporation
that is included pursuant to section 951 of the Internal Revenue Code is dividend income.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 47.

Minnesota Statutes 2022, section 290.21, is amended by adding a subdivision to
read:

new text begin Subd. 10.new text end

new text begin Global intangible low-taxed income.new text end

new text begin Any amounts included in taxable income
pursuant to section 951A of the Internal Revenue Code, are dividend income.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 48.

Minnesota Statutes 2022, section 297I.20, is amended by adding a subdivision
to read:

new text begin Subd. 6.new text end

new text begin Short line railroad infrastructure modernization credit.new text end

new text begin A taxpayer may
claim a credit against the premiums tax imposed under this chapter equal to the amount
indicated on the credit certificate statement issued to the company under section 290.0695,
provided that the taxpayer is not also claiming a credit under that section for the same
qualified railroad reconstruction or replacement expenditures. If the amount of the credit
exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to
each of the five succeeding taxable years. The entire amount of the excess unused credit
for the taxable year must be carried first to the earliest of the taxable years to which the
credit may be carried and then to each successive year to which the credit may be carried.
This credit does not affect the calculation of fire state aid under section 477B.03 and police
state aid under section 477C.03. This subdivision expires January 1, 2031, for taxable years
beginning after December 31, 2030.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 49. new text begin ONETIME REFUNDABLE TAX CREDIT PAYMENT.
new text end

new text begin Subdivision 1.new text end

new text begin Credit allowed; eligibility.new text end

new text begin (a) For taxable years beginning after December
31, 2020, and before January 1, 2022, a taxpayer is allowed a credit against the individual
income tax imposed under Minnesota Statutes, chapter 290. The credit equals $520 for a
married couple filing a joint return and $260 for a single filer, head of household, or married
taxpayer filing a separate return.
new text end

new text begin (b) For a taxpayer with a dependent as defined in sections 151 and 152 of the Internal
Revenue Code, the credit is increased by $260 per dependent up to an additional maximum
credit of $780.
new text end

new text begin (c) The credit is not available to a taxpayer who:
new text end

new text begin (1) was not a resident of Minnesota, as defined in Minnesota Statutes, section 290.01,
subdivision 7, during any part of 2021;
new text end

new text begin (2) was a dependent, as defined in sections 151 and 152 of the Internal Revenue Code,
for 2021;
new text end

new text begin (3) did not file a 2021 Minnesota individual income tax return, or a property tax refund
return under Minnesota Statutes, chapter 290A, based on property taxes payable in 2022 or
rent constituting property taxes paid in 2021, by December 31, 2022;
new text end

new text begin (4) had adjusted gross income, as defined in Minnesota Statutes, section 290.01,
subdivision 21a, for taxable years beginning in 2021 greater than:
new text end

new text begin (i) $150,000 for a married couple filing a joint return; and
new text end

new text begin (ii) $75,000 for all other income tax filers; or
new text end

new text begin (5) died before January 1, 2023.
new text end

new text begin (d) For an individual who is a Minnesota resident for only part of 2021, or for a married
couple filing a joint return where one or both spouses were not Minnesota residents for all
of 2021, the credit equals the credit allowed under paragraphs (a) to (c) multiplied by the
percentage calculated under Minnesota Statutes, section 290.06, subdivision 2c, paragraph
(e).
new text end

new text begin (e) If the amount of the credit under this subdivision exceeds the taxpayer's liability for
tax under Minnesota Statutes, chapter 290, the commissioner shall refund the excess to the
taxpayer. The commissioner shall pay the credit based on information available in the
commissioner's records on January 1, 2023, and taxpayers are not required to file a claim
with the commissioner. The commissioner's determination is final and cannot be appealed.
new text end

new text begin (f) The commissioner may contract with a third party to implement all or part of the
payment process of this section.
new text end

new text begin Subd. 2.new text end

new text begin Adjustments.new text end

new text begin (a) If the commissioner determines that a taxpayer who received
a payment under subdivision 1 is not eligible for the credit, the commissioner may recover
the overpayment.
new text end

new text begin (b) If, within the time for requesting a refund under Minnesota Statutes, section 289A.40,
the commissioner determines that a taxpayer meets all requirements under subdivision 1
but did not receive proper payment of the credit, the commissioner shall pay the credit to
the taxpayer.
new text end

new text begin (c) All provisions not inconsistent with this section under Minnesota Statutes, chapters
270C and 289A, relating to audit, assessment, penalties, interest, enforcement, collection
remedies, appeal and administration of the 2021 individual income tax apply to this section.
No interest is payable on any amounts paid under section.
new text end

new text begin Subd. 3.new text end

new text begin Definitions.new text end

new text begin The definitions in Minnesota Statutes, section 290.01, apply for
this section.
new text end

new text begin Subd. 4.new text end

new text begin Data classification.new text end

new text begin Data classified as nonpublic or private data on individuals,
including return information, as defined in Minnesota Statutes, section 270B.01, subdivision
3, may be shared or disclosed between the commissioner of revenue and any third-party
vendor contracted with under this section, to the extent necessary to administer this section.
new text end

new text begin Subd. 5.new text end

new text begin Credit not subject to recapture.new text end

new text begin The commissioner of revenue must not apply,
and must not certify to another agency to apply, a refund based on a credit under this section
to any unpaid tax or nontax debt.
new text end

new text begin Subd. 6.new text end

new text begin Not income.new text end

new text begin (a) The credit under this section is not considered income in
determining Minnesota income tax, Minnesota income tax credits, the Minnesota property
tax refund, or the Minnesota senior citizen property tax deferral.
new text end

new text begin (b) Notwithstanding any law to the contrary, the credit under this section must not be
considered income, assets, or personal property for purposes of determining eligibility or
recertifying eligibility for:
new text end

new text begin (1) child care assistance programs under Minnesota Statutes, chapter 199B;
new text end

new text begin (2) general assistance, Minnesota supplemental aid, and food support under Minnesota
Statutes, chapter 256D;
new text end

new text begin (3) housing support under Minnesota Statutes, chapter 256I;
new text end

new text begin (4) the Minnesota family investment program and diversionary work programs under
Minnesota Statutes, chapter 256J; and
new text end

new text begin (5) economic assistance programs under Minnesota Statutes, chapter 256P.
new text end

new text begin (c) The commissioner of human services must not consider a credit under this section
as income or assets under Minnesota Statutes, section 256B.056, subdivision 1a, paragraph
(a), 3, or 3c, or for persons with eligibility determined under Minnesota Statutes, section
256B.057, subdivision 3, 3a, or 3b.
new text end

new text begin Subd. 7.new text end

new text begin Contracting with private vendors.new text end

new text begin (a) To the extent necessary to administer
this section, the commissioner of revenue is exempt from the requirements of Minnesota
Statutes, sections 16A.15, subdivision 3, 16C.05, and 16C.06, and any other state
procurement laws, rules, and procedures.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, sections 9.031 and 16B.49, Minnesota Statutes,
chapter 16C, and any other law to the contrary, the commissioner of revenue may take
whatever actions the commissioner deems necessary to make payments required by this
section, and may, in consultation with the commissioner of management and budget, contract
with a private vendor or vendors to process, print, mail or deliver the checks, warrants, or
debit cards and notices required under this section and receive and disburse state funds to
make the payments by check, warrant, electronic funds transfer, or debit card.
new text end

new text begin Subd. 8.new text end

new text begin Appropriation.new text end

new text begin (a) The amount necessary to make the refunds based on credits
payable under this section is appropriated to the commissioner of revenue from the general
fund.
new text end

new text begin (b) $1,000,000 in fiscal year 2023 is appropriated from the general fund to the
commissioner of revenue for administrative costs to implement the payments under this
section. This appropriation does not lapse and is available until June 30, 2025. This
appropriation is onetime.
new text end

new text begin (c) $21,000,000 in fiscal year 2024 is appropriated from the general fund to the
commissioner of revenue for administrative costs to implement the payments under this
section. This appropriation is available until June 30, 2025.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020, and before January 1, 2022.
new text end

Sec. 50. new text begin HISTORIC STRUCTURE REHABILITATION CREDIT; SPECIAL
PROVISION.
new text end

new text begin For the purposes of the credit under Minnesota Statutes, section 290.0681, projects that
have started rehabilitation work after June 30, 2022, and before July 1, 2023, that otherwise
meet all other requirements of Minnesota Statutes, section 290.0681, subdivision 3, may
be eligible for the credit if the application is received on or before August 30, 2023.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 51. new text begin REVIVAL AND REENACTMENT OF EXPIRED PROVISIONS.
new text end

new text begin (a) The expired provisions of Minnesota Statutes, section 116J.8737, subdivisions 1 to
9, 11, and 12, as amended by Laws 2021, First Special Session chapter 14, article 1, sections
1 and 2, and sections 6 and 7 of this article, are revived and reenacted.
new text end

new text begin (b) The expired provisions of Minnesota Statutes, section 290.0692, are revived and
reenacted.
new text end

new text begin (c) The expired provisions of Minnesota Statutes, section 290.0681, subdivisions 1 to
9, are revived and reenacted.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin Paragraphs (a) and (b) are effective for taxable years beginning
after December 31, 2022. Paragraph (c) is effective retroactively for applications for
allocation certificates submitted after June 30, 2022.
new text end

Sec. 52. new text begin SUBTRACTION; CERTAIN UNEMPLOYMENT COMPENSATION.
new text end

new text begin (a) For the purposes of this section, "subtraction" has the meaning given in Minnesota
Statutes, section 290.0132, subdivision 1, and the rules in that subdivision apply for this
section.
new text end

new text begin (b) Unemployment compensation received by individuals in taxable years beginning
after December 31, 2020, and before January 1, 2022, as a result of the decision issued by
the Minnesota Court of Appeals, 956 N.W. 2d 1, filed February 22, 2021, is a subtraction.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020, and before January 1, 2022.
new text end

Sec. 53. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, sections 290.01, subdivision 19i; 290.0131, subdivision 18;
290.0132, subdivision 28; and 290.0134, subdivision 17,new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

ARTICLE 2

FEDERAL CONFORMITY

Section 1.

Minnesota Statutes 2022, section 289A.02, subdivision 7, as amended by Laws
2023, chapter 1, section 1, is amended to read:

Subd. 7.

Internal Revenue Code.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time the
changes were effective for federal purposes.
new text end

Sec. 2.

Minnesota Statutes 2022, section 290.01, subdivision 19, as amended by Laws
2023, chapter 1, section 4, is amended to read:

Subd. 19.

Net income.

(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(e) The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through deleted text begin December 15, 2022deleted text end new text begin May
1, 2023new text end , applies for taxable years beginning after December 31, 1996.

new text begin EFFECTIVE DATE.new text end

Sec. 3.

Minnesota Statutes 2022, section 290.01, subdivision 31, as amended by Laws
2023, chapter 1, section 5, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
15, 2022deleted text end new text begin May 1, 2023new text end . Internal Revenue Code also includes any uncodified provision in
federal law that relates to provisions of the Internal Revenue Code that are incorporated
into Minnesota law.

new text begin EFFECTIVE DATE.new text end

Sec. 4.

Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws
2023, chapter 1, section 15, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:

(1) On the first $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin anddeleted text end
17,new text begin 19, and 20,new text end and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, 27, deleted text begin anddeleted text end 31,new text begin and 32,new text end and 290.0137, paragraph (c), after
applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17;
and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
deleted text begin anddeleted text end 31,new text begin and 32,new text end and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2018.
new text end

Sec. 5.

Minnesota Statutes 2022, section 290A.03, subdivision 15, as amended by Laws
2023, chapter 1, section 20, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through deleted text begin December 15, 2022deleted text end new text begin May 1, 2023new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with refunds based on rent
paid in 2023 and property taxes payable in 2024.
new text end

Sec. 6.

Minnesota Statutes 2022, section 291.005, subdivision 1, as amended by Laws
2023, chapter 1, section 21, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income interest
for life and for which an election was made under section 291.03, subdivision 1d, for
Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended through deleted text begin December 15, 2022deleted text end new text begin May 1, 2023new text end .

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included in the estate which has its situs outside Minnesota,
and (b) including any property omitted from the federal gross estate which is includable in
the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death
was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed
by the court to administer and dispose of the property of the decedent. If there is no executor,
administrator or other person appointed, qualified, and acting within this state, then any
person in actual or constructive possession of any property having a situs in this state which
is included in the federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due with respect
to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was
in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or
located at the time of the decedent's death or for a gift of tangible personal property within
three years of death, the state or country in which it was normally kept or located when the
gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled
at death or for a gift of intangible personal property within three years of death, the state or
country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent. If
the pass-through entity is owned by a person or persons in addition to the decedent, ownership
of the property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether
it is taxed as an association or is disregarded for federal income tax purposes under Code
of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate;
but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under section
6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE.new text end

Sec. 7.

Laws 2023, chapter 1, section 15, the effective date, is amended to read:

EFFECTIVE DATE.

This section is effectivenew text begin retroactivelynew text end for taxable years beginning
after December 31, deleted text begin 2022deleted text end new text begin 2019new text end .

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 290.0132, subdivision 33,new text end new text begin as added by Laws 2023,
chapter 1, section 12, is repealed.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 3

PROPERTY TAX

Section 1.

Minnesota Statutes 2022, section 103D.905, subdivision 3, is amended to read:

Subd. 3.

General fund.

A general fund, consisting of an ad valorem tax levy, may not
exceed deleted text begin 0.048deleted text end new text begin 0.096new text end percent of estimated market value, or deleted text begin $250,000deleted text end new text begin $500,000new text end , whichever
is less. The money in the fund shall be used for general administrative expenses and for the
construction or implementation and maintenance of projects of common benefit to the
watershed district. The managers may make an annual levy for the general fund as provided
in section 103D.911. In addition to the annual general levy, the managers may annually
levy a tax not to exceed 0.00798 percent of estimated market value for a period not to exceed
15 consecutive years to pay the cost attributable to the basic water management features of
projects initiated by petition of a political subdivision within the watershed district or by
petition of at least 50 resident owners whose property is within the watershed district.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024
and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2022, section 272.02, subdivision 24, is amended to read:

Subd. 24.

Solar energy generating systems.

Personal property consisting of solar energy
generating systems, as defined in section 272.0295, is exempt. If the real property upon
which a solar energy generating system is located is used primarily for solar energy
production subject to the production tax under section 272.0295, the real property shall be
classified as class 3a. If the real property upon which a solar energy generating system is
located is not used primarily for solar energy production subject to the production tax under
section 272.0295, the real property shall be classified without regard to the system.new text begin If real
property contains more than one solar energy generating system that cannot be combined
with the nameplate capacity of another solar energy generating system for the purposes of
the production tax under section 272.0295, but is in aggregate over one megawatt, then the
real property upon which the systems are located shall be classified as class 3a.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 3.

Minnesota Statutes 2022, section 272.02, subdivision 98, is amended to read:

Subd. 98.

Certain property owned by an Indian tribe.

(a) Property is exempt that:

(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable in 2013;

(2) is located in a city of the first class with a population greater than 300,000 as of the
2010 federal census;

(3) was on January 2, 2012, and is for the current assessment owned by a federally
recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
and

(4) is used exclusively for tribal purposes or institutions of purely public charity as
defined in subdivision 7.

(b) For purposes of this subdivision, a "tribal purpose" means a public purpose as defined
in subdivision 8 and includes noncommercial tribal government activities. Property that
qualifies for the exemption under this subdivision is limited to no more than two contiguous
parcels and structures that do not exceed in the aggregate 20,000 square feet. Property
acquired for single-family housing, market-rate apartments, agriculture, or forestry does
not qualify for this exemption. deleted text begin The exemption created bydeleted text end This subdivision expires with
taxes payable in deleted text begin 2024deleted text end new text begin 2034new text end .

new text begin (c) Property exempt under this section is exempt from the requirements of section
272.025. Upon the written request of an assessor, all books and records relating to the
ownership or use of the property which are reasonably necessary to verify that the property
qualifies for exemption shall be made available to the assessor.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for property taxes payable in 2023 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2022, section 272.02, is amended by adding a subdivision to
read:

new text begin Subd. 105.new text end

new text begin Elderly living facility.new text end

new text begin An elderly living facility is exempt from taxation if
it meets all of the following requirements:
new text end

new text begin (1) the facility is located in a city of the first class with a population of fewer than
110,000;
new text end

new text begin (2) the facility is owned and operated by a nonprofit organization with tax exempt status
under section 501(c)(3) of the Internal Revenue Code;
new text end

new text begin (3) construction of the facility was completed between January 1, 1963, and January 1,
1964;
new text end

new text begin (4) the facility is an assisted living facility licensed by the state of Minnesota;
new text end

new text begin (5) residents of the facility must be (i) at least 55 years of age, or (ii) disabled; and
new text end

new text begin (6) at least 30 percent of the units in the facility are occupied by persons whose annual
income does not exceed 50 percent of the median family income for the area.
new text end

new text begin For assessment year 2022 only, an exemption application under this section must be filed
with the county assessor by June 15, 2023.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with taxes payable in 2023.
new text end

Sec. 5.

Minnesota Statutes 2022, section 273.11, subdivision 12, is amended to read:

Subd. 12.

Community land trusts.

(a) A community land trust, as defined under chapter
462A, is (i) a community-based nonprofit corporation organized under chapter 317A, which
qualifies for tax exempt status under 501(c)(3), or (ii) a "city" as defined in section 462C.02,
subdivision 6, which has received funding from the Minnesota housing finance agency for
purposes of the community land trust program. The Minnesota Housing Finance Agency
shall set the criteria for community land trusts.

(b) Before the community land trust can rent or sell a unit to an applicant, the community
land trust shall verify to the satisfaction of the administering agency or the city that the
family income of each person or family applying for a unit in the community land trust
building is within the income criteria provided in section 462A.30, subdivision 9. The
administering agency or the city shall verify to the satisfaction of the county assessor that
the occupant meets the income criteria under section 462A.30, subdivision 9. The property
tax benefits under paragraph (c) shall be granted only to property owned or rented by persons
or families within the qualifying income limits. The family income criteria and verification
is only necessary at the time of initial occupancy in the property.

(c) A unit which is owned by the occupant and used as a homestead by the occupant
qualifies for homestead treatment as class 1a under section 273.13, subdivision 22new text begin ,new text end new text begin unless
the unit meets the requirements of section 273.13, subdivision 25, paragraph (e), clause (2),
in which case the unit shall be classified as 4d(2)new text end . A unit which is rented by the occupant
and used as a homestead by the occupant shall be class 4a or 4b property, under section
273.13, subdivision 25, whichever is applicable. Any remaining portion of the property not
used for residential purposes shall be classified by the assessor in the appropriate class based
upon the use of that portion of the property owned by the community land trust. The land
upon which the building is located shall be assessed at the same classification rate as the
units within the building, provided that if the building contains some units assessed as class
1anew text begin or class 4d(2)new text end and some units assessed as class 4a or 4b, the market value of the land
will be assessed in the same proportions as the value of the building.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 6.

Minnesota Statutes 2022, section 273.11, subdivision 23, is amended to read:

Subd. 23.

First tier valuation limit; agricultural homestead property.

(a) The
commissioner of revenue shall annually certify the first tier limit for agricultural homestead
property. For assessment year deleted text begin 2010deleted text end new text begin 2024new text end , the limit is deleted text begin $1,140,000deleted text end new text begin $3,500,000new text end . Beginning
with assessment year deleted text begin 2011deleted text end new text begin 2025new text end , the limit is the product of (i) the first tier limit for the
preceding assessment year, and (ii) the ratio of the statewide average taxable market value
of agricultural property per acre of deeded farm land in the preceding assessment year to
the statewide average taxable market value of agricultural property per acre of deeded farm
land for the second preceding assessment year. The limit shall be rounded to the nearest
$10,000.

(b) For the purposes of this subdivision, "agricultural property" means all class 2a
property under section 273.13, subdivision 23, except for property consisting of the house,
garage, and immediately surrounding one acre of land of an agricultural homestead.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 7.

Minnesota Statutes 2022, section 273.111, is amended by adding a subdivision to
read:

new text begin Subd. 3b.new text end

new text begin Property no longer eligible for deferment.new text end

new text begin (a) Real estate that received the
tax deferment under this section for assessment year 2012 and would have continued to
qualify for tax deferment for assessment years from 2013 to 2023 but for an eminent domain
action that reduced the real estate to less than ten acres, shall reapply as provided in paragraph
(b) and, if determined eligible, shall qualify for the tax deferment under this section for
assessment year 2024 and thereafter until:
new text end

new text begin (1) the property no longer qualifies for classification as class 2a under section 273.13;
new text end

new text begin (2) the property is voluntarily withdrawn from the program; or
new text end

new text begin (3) the property is sold, transferred, or subdivided.
new text end

new text begin (b) Application for deferment under this subdivision shall be filed by May 1 of the year
prior to the year in which the taxes are payable. The application must be filed with the
assessor of the taxing district in which the real property is located on the form prescribed
by the commissioner of revenue. The assessor may request additional information necessary
to determine eligibility under this subdivision.
new text end

new text begin (c) Property assessed under this subdivision is subject to additional taxes, as provided
in subdivision 9, when the property:
new text end

new text begin (1) no longer qualifies for classification as class 2a under section 273.13;
new text end

new text begin (2) is voluntarily withdrawn from the program; or
new text end

new text begin (3) is sold, transferred, or subdivided.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for assessment year 2024 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2022, section 273.124, subdivision 6, is amended to read:

Subd. 6.

Leasehold cooperatives.

When one or more dwellings or one or more buildings
which each contain several dwelling units is owned by a nonprofit corporation subject to
the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the
Internal Revenue Code, or a limited partnership which corporation or partnership operates
the property in conjunction with a cooperative association, and has received public financing,
homestead treatment may be claimed by the cooperative association on behalf of the members
of the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers new text begin or
individual taxpayer identification numbers new text end of those members. To qualify for the treatment
provided by this subdivision, the following conditions must be met:

(a) the cooperative association must be organized under chapter 308A or 308B and all
voting members of the board of directors must be resident tenants of the cooperative and
must be elected by the resident tenants of the cooperative;

(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;

(c) to the extent permitted under state or federal law, the cooperative association must
have a right under a written agreement with the owner to purchase the property if the owner
proposes to sell it; if the cooperative association does not purchase the property it is offered
for sale, the owner may not subsequently sell the property to another purchaser at a price
lower than the price at which it was offered for sale to the cooperative association unless
the cooperative association approves the sale;

(d) a minimum of 40 percent of the cooperative association's members must have incomes
at or less than 60 percent of area median gross income as determined by the United States
Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal
Revenue Code. For purposes of this clause, "member income" means the income of a member
existing at the time the member acquires cooperative membership;

(e) if a limited partnership owns the property, it must include as the managing general
partner a nonprofit organization operating under the provisions of chapter 317A and
qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited
partnership agreement must provide that the managing general partner have sufficient powers
so that it materially participates in the management and control of the limited partnership;

(f) prior to becoming a member of a leasehold cooperative described in this subdivision,
a person must have received notice that (1) describes leasehold cooperative property in plain
language, including but not limited to the effects of classification under this subdivision on
rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that
copies of the articles of incorporation and bylaws of the cooperative association, the lease
between the owner and the cooperative association, a sample sublease between the
cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited
partnership agreement, can be obtained upon written request at no charge from the owner,
and the owner must send or deliver the materials within seven days after receiving any
request;

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy shall
be disclosed to any occupant who has requested a copy of the document. Copies of the
articles of incorporation and certificate of limited partnership shall be filed with the secretary
of state after the expiration of the 60-day period unless the change to leasehold cooperative
status does not proceed;

(h) the county attorney of the county in which the property is located must certify to the
assessor that the property meets the requirements of this subdivision;

(i) the public financing received must be from at least one of the following sources:

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;

(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue
Code, the proceeds of which are used for the acquisition or rehabilitation of the building;

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing
Act;

(4) rental housing program funds under Section 8 of the United States Housing Act of
1937, as amended, or the market rate family graduated payment mortgage program funds
administered by the Minnesota Housing Finance Agency that are used for the acquisition
or rehabilitation of the building;

(5) low-income housing credit under section 42 of the Internal Revenue Code;

(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or

(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;

(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:

(1) that the granting of the homestead treatment of the apartment's units will facilitate
safe, clean, affordable housing for the cooperative members that would otherwise not be
available absent the homestead designation;

(2) that the owner has presented information satisfactory to the governing body showing
that the savings garnered from the homestead designation of the units will be used to reduce
tenant's rents or provide a level of furnishing or maintenance not possible absent the
designation; and

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

Homestead treatment must be afforded to units occupied by members of the cooperative
association and the units must be assessed as provided in subdivision 3, provided that any
unit not so occupied shall be classified and assessed pursuant to the appropriate class. No
more than three acres of land may, for assessment purposes, be included with each dwelling
unit that qualifies for homestead treatment under this subdivision.

When dwelling units no longer qualify under this subdivision, the current owner must
notify the assessor within 60 days. Failure to notify the assessor within 60 days shall result
in the loss of benefits under this subdivision for taxes payable in the year that the failure is
discovered. For these purposes, "benefits under this subdivision" means the difference in
the net tax capacity of the units which no longer qualify as computed under this subdivision
and as computed under the otherwise applicable law, times the local tax rate applicable to
the building for that taxes payable year. Upon discovery of a failure to notify, the assessor
shall inform the auditor of the difference in net tax capacity for the building or buildings in
which units no longer qualify, and the auditor shall calculate the benefits under this
subdivision. Such amount, plus a penalty equal to 100 percent of that amount, shall then be
demanded of the building's owner. The property owner may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section 278.01
and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court
within 60 days of the date of the notice from the county. The appeal shall be governed by
the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as
defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and
278.03, but including section 278.05, subdivision 2. If the amount of the benefits under this
subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the
county auditor shall certify the amount of the benefit and penalty to the succeeding year's
tax list to be collected as part of the property taxes on the affected buildings.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2022, section 273.124, subdivision 13, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead requirements
under subdivision 1 must file a homestead application with the county assessor to initially
obtain homestead classification.

(b) The commissioner shall prescribe the content, format, and manner of the homestead
application required to be filed under this chapter pursuant to section 270C.30. The
application must clearly inform the taxpayer that this application must be signed by all
owners who occupy the property or by the qualifying relative and returned to the county
assessor in order for the property to receive homestead treatment.

(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number new text begin or individual taxpayer identification number new text end of
each occupant who is listed as an owner of the property on the deed of record, the name
and address of each owner who does not occupy the property, and the name and Social
Security number new text begin or individual taxpayer identification number new text end of the spouse of each occupying
owner. The application must be signed by each owner who occupies the property and by
each owner's spouse who occupies the property, or, in the case of property that qualifies as
a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not claim
another property as a homestead unless the property owner and the property owner's spouse
file with the assessor an affidavit or other proof required by the assessor stating that the
property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously occupied
with the other spouse, either of whom fail to include the other spouse's name and Social
Security number new text begin or individual taxpayer identification number new text end on the homestead application
or provide the affidavits or other proof requested, will be deemed to have elected to receive
only partial homestead treatment of their residence. The remainder of the residence will be
classified as nonhomestead residential. When an owner or spouse's name and Social Security
number new text begin or individual taxpayer identification number new text end appear on homestead applications for
two separate residences and only one application is signed, the owner or spouse will be
deemed to have elected to homestead the residence for which the application was signed.

(d) If residential real estate is occupied and used for purposes of a homestead by a relative
of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for
the property to receive homestead status, a homestead application must be filed with the
assessor. The Social Security number new text begin or individual taxpayer identification number new text end of each
relative occupying the property and the name and Social Security number new text begin or individual
taxpayer identification number new text end of the spouse of a relative occupying the property shall be
required on the homestead application filed under this subdivision. If a different relative of
the owner subsequently occupies the property, the owner of the property must notify the
assessor within 30 days of the change in occupancy. The Social Security number new text begin or individual
taxpayer identification number new text end of a relative occupying the property or the spouse of a relative
occupying the property is private data on individuals as defined by section 13.02, subdivision
12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding
under the Revenue Recapture Act to recover personal property taxes owing, to the county
treasurer.

(e) The homestead application shall also notify the property owners that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or the
owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to notify
the assessor within 30 days that the property has been sold, transferred, or that the owner,
the spouse of the owner, or the relative is no longer occupying the property as a homestead,
shall result in the penalty provided under this subdivision and the property will lose its
current homestead status.

(f) If a homestead application has not been filed with the county by December 31, the
assessor shall classify the property as nonhomestead for the current assessment year for
taxes payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2022, section 273.124, subdivision 13a, is amended to read:

Subd. 13a.

Occupant list.

At the request of the commissioner, each county must give
the commissioner a list that includes the name and Social Security number new text begin or individual
taxpayer identification number new text end of each occupant of homestead property who is the property
owner, property owner's spouse, qualifying relative of a property owner, or a spouse of a
qualifying relative. The commissioner shall use the information provided on the lists as
appropriate under the law, including for the detection of improper claims by owners, or
relatives of owners, under chapter 290A.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2022, section 273.124, subdivision 13c, is amended to read:

Subd. 13c.

Property lists.

In addition to lists of homestead properties, the commissioner
may ask the counties to furnish lists of all properties and the record owners. The Social
Security numbersnew text begin , individual taxpayer identification numbers,new text end and federal identification
numbers that are maintained by a county or city assessor for property tax administration
purposes, and that may appear on the lists retain their classification as private or nonpublic
data; but may be viewed, accessed, and used by the county auditor or treasurer of the same
county for the limited purpose of assisting the commissioner in the preparation of microdata
samples under section 270C.12. The commissioner shall use the information provided on
the lists as appropriate under the law, including for the detection of improper claims by
owners, or relatives of owners, under chapter 290A.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2022, section 273.124, subdivision 13d, is amended to read:

Subd. 13d.

Homestead data.

On or before April 30 each year beginning in 2007, each
county must provide the commissioner with the following data for each parcel of homestead
property by electronic means as defined in section 289A.02, subdivision 8:

(1) the property identification number assigned to the parcel for purposes of taxes payable
in the current year;

(2) the name and Social Security number new text begin or individual taxpayer identification number
new text end of each occupant of homestead property who is the property owner or qualifying relative
of a property owner, and the spouse of the property owner who occupies homestead property
or spouse of a qualifying relative of a property owner who occupies homestead property;

(3) the classification of the property under section 273.13 for taxes payable in the current
year and in the prior year;

(4) an indication of whether the property was classified as a homestead for taxes payable
in the current year because of occupancy by a relative of the owner or by a spouse of a
relative;

(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(6) the market value of improvements to the property first assessed for tax purposes for
taxes payable in the current year;

(7) the assessor's estimated market value assigned to the property for taxes payable in
the current year and the prior year;

(8) the taxable market value assigned to the property for taxes payable in the current
year and the prior year;

(9) whether there are delinquent property taxes owing on the homestead;

(10) the unique taxing district in which the property is located; and

(11) such other information as the commissioner decides is necessary.

The commissioner shall use the information provided on the lists as appropriate under
the law, including for the detection of improper claims by owners, or relatives of owners,
under chapter 290A.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective for homestead data provided to the
commissioner in 2024 and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2022, section 273.124, subdivision 14, is amended to read:

Subd. 14.

Agricultural homesteads; special provisions.

(a) Real estate of less than ten
acres that is the homestead of its owner must be classified as class 2a under section 273.13,
subdivision 23, paragraph (a), if:

(1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in lieu
taxes are paid under sections 477A.11 to 477A.14 or section 477A.17;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20
acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal to
at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.

(b)(i) Agricultural property shall be classified as the owner's homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:

(1) the agricultural property consists of at least 40 acres including undivided government
lots and correctional 40's;

(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner
or of the owner's spouse, is actively farming the agricultural property, either on the person's
own behalf as an individual or on behalf of a partnership operating a family farm, family
farm corporation, joint family farm venture, or limited liability company of which the person
is a partner, shareholder, or member;

(3) both the owner of the agricultural property and the person who is actively farming
the agricultural property under clause (2), are Minnesota residents;

(4) neither the owner nor the spouse of the owner claims another agricultural homestead
in Minnesota; and

(5) neither the owner nor the person actively farming the agricultural property lives
farther than four townships or cities, or a combination of four townships or cities, from the
agricultural property, except that if the owner or the owner's spouse is required to live in
employer-provided housing, the owner or owner's spouse, whichever is actively farming
the agricultural property, may live more than four townships or cities, or combination of
four townships or cities from the agricultural property.

The relationship under this paragraph may be either by blood or marriage.

(ii) Property containing the residence of an owner who owns qualified property under
clause (i) shall be classified as part of the owner's agricultural homestead, if that property
is also used for noncommercial storage or drying of agricultural crops.

(iii) As used in this paragraph, "agricultural property" means class 2a property and any
class 2b property that is contiguous to and under the same ownership as the class 2a property.

(c) Noncontiguous land shall be included as part of a homestead under section 273.13,
subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached
land is located in the same township or city, or not farther than four townships or cities or
combination thereof from the homestead. Any taxpayer of these noncontiguous lands must
notify the county assessor that the noncontiguous land is part of the taxpayer's homestead,
and, if the homestead is located in another county, the taxpayer must also notify the assessor
of the other county.

(d) Agricultural land used for purposes of a homestead and actively farmed by a person
holding a vested remainder interest in it must be classified as a homestead under section
273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other
dwellings on the land used for purposes of a homestead by persons holding vested remainder
interests who are actively engaged in farming the property, and up to one acre of the land
surrounding each homestead and reasonably necessary for the use of the dwelling as a home,
must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as
agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or
Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 1997 assessment year and continue to be used for
agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997 floods,
and the owner furnishes the assessor any information deemed necessary by the assessor in
verifying the change in dwelling. Further notifications to the assessor are not required if the
property continues to meet all the requirements in this paragraph and any dwellings on the
agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified
agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur,
Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of
one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph and
any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property of a family farm corporation, joint family farm venture, family
farm limited liability company, or partnership operating a family farm as described under
subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead
property, if all of the following criteria are met:

(1) the property consists of at least 40 acres including undivided government lots and
correctional 40's;

(2) a shareholder, member, or partner of that entity is actively farming the agricultural
property;

(3) that shareholder, member, or partner who is actively farming the agricultural property
is a Minnesota resident;

(4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and

(5) that shareholder, member, or partner does not live farther than four townships or
cities, or a combination of four townships or cities, from the agricultural property.

Homestead treatment applies under this paragraph even if:

(i) the shareholder, member, or partner of that entity is actively farming the agricultural
property on the shareholder's, member's, or partner's own behalf; or

(ii) the family farm is operated by a family farm corporation, joint family farm venture,
partnership, or limited liability company other than the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land, provided that:

(A) the shareholder, member, or partner of the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land who is actively
farming the land is a shareholder, member, or partner of the family farm corporation, joint
family farm venture, partnership, or limited liability company that is operating the farm;
and

(B) more than half of the shareholders, members, or partners of each family farm
corporation, joint family farm venture, partnership, or limited liability company are persons
or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
paragraphs (c) and (d).

Homestead treatment applies under this paragraph for property leased to a family farm
corporation, joint farm venture, limited liability company, or partnership operating a family
farm if legal title to the property is in the name of an individual who is a member, shareholder,
or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an initial
full application must be submitted to the county assessor where the property is located.
Owners and the persons who are actively farming the property shall be required to complete
only a one-page abbreviated version of the application in each subsequent year provided
that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within the
four townships or city criteria and are Minnesota residents;

(3) the same operator of the agricultural property is listed with the Farm Service Agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.

The owners and any persons who are actively farming the property must include the
appropriate Social Security numbersnew text begin or individual taxpayer identification numbersnew text end , and sign
and date the application. If any of the specified information has changed since the full
application was filed, the owner must notify the assessor, and must complete a new
application to determine if the property continues to qualify for the special agricultural
homestead. The commissioner of revenue shall prepare a standard reapplication form for
use by the assessors.

(i) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified
agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele,
Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 2007 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of
one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the August 2007
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph and
any dwellings on the agricultural land remain uninhabited.

(j) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as
agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the March 2009 floods;

(2) the property is located in the county of Marshall;

(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 2008 assessment year and continue to be used for
agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 2009 floods,
and the owner furnishes the assessor any information deemed necessary by the assessor in
verifying the change in dwelling. Further notifications to the assessor are not required if the
property continues to meet all the requirements in this paragraph and any dwellings on the
agricultural land remain uninhabited.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2022, section 273.1245, subdivision 1, is amended to read:

Subdivision 1.

Private or nonpublic data.

The following data are private or nonpublic
data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county
or local assessor under section 273.124, 273.13, or another section, to support a claim for
the property tax homestead classification under section 273.13, or other property tax
classification or benefit:

(1) Social Security numbers;

new text begin (2) individual taxpayer identification numbers;
new text end

deleted text begin (2)deleted text end new text begin (3)new text end copies of state or federal income tax returns; and

deleted text begin (3)deleted text end new text begin (4)new text end state or federal income tax return information, including the federal income tax
schedule F.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective retroactively for homestead applications
filed in 2023 and thereafter.
new text end

Sec. 15.

Minnesota Statutes 2022, section 273.128, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

new text begin (a) new text end Low-income rental property classified as class deleted text begin 4ddeleted text end new text begin
4d(1)new text end under section 273.13, subdivision 25, is entitled to valuation under this section if at
least 20 percent of the units in the rental housing property meet any of the following
qualifications:

(1) the units are subject to a housing assistance payments contract under Section 8 of
the United States Housing Act of 1937, as amended;

(2) the units are rent-restricted and income-restricted units of a qualified low-income
housing project receiving tax credits under section 42(g) of the Internal Revenue Code;

(3) the units are financed by the Rural Housing Service of the United States Department
of Agriculture and receive payments under the rental assistance program pursuant to section
521(a) of the Housing Act of 1949, as amended; or

(4) the units are subject to rent and income restrictions under the terms of financial
assistance provided to the rental housing property by the federal government or the state of
Minnesota, or a local unit of government, as evidenced by a document recorded against the
property.

The restrictions must require assisted units to be occupied by residents whose household
income at the time of initial occupancy does not exceed 60 percent of the greater of area or
state median income, adjusted for family size, as determined by the United States Department
of Housing and Urban Development. The restriction must also require the rents for assisted
units to not exceed 30 percent of 60 percent of the greater of area or state median income,
adjusted for family size, as determined by the United States Department of Housing and
Urban Development.

new text begin (b) The owner of a property certified as class 4d(1) under this section must use the
property tax savings received from the 4d(1) classification for one or more of the following
eligible uses: property maintenance, property security, improvements to the property, rent
stabilization, or increases to the property's replacement reserve account. To maintain the
class 4d(1) classification, the property owner must annually reapply and certify to the
Housing Finance Agency that the property tax savings were used for one or more eligible
uses.
new text end

new text begin (c) In order to meet the requirements of this section, property which received the 4d(1)
classification in the prior year must demonstrate compliance with paragraph (b).
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 16.

Minnesota Statutes 2022, section 273.128, is amended by adding a subdivision
to read:

new text begin Subd. 1a.new text end

new text begin Approval.new text end

new text begin A property owner must receive approval by resolution of the
governing body of the city or town where the property is located before submitting an initial
application to the Housing Finance Agency, as required under subdivision 2, for property
that has not, in whole or in part, been classified as class 4d(1) under section 273.13,
subdivision 25, prior to assessment year 2024. A property owner that receives approval as
required under this subdivision, and the certification made under subdivision 3, shall not
be required to seek approval under this subdivision prior to submitting an application under
subdivision 2 in each subsequent year. If the property is located in a city or town in which
the net tax capacity of 4d(1) property did not exceed two percent of the total net tax capacity
in the city or town in the prior assessment year, the property owner does not need to receive
approval under this subdivision. The commissioner of revenue must annually certify to the
Housing Finance Agency a list of the cities and towns in which the net tax capacity of 4d(1)
property exceeded two percent of the total net tax capacity in the prior assessment year.
new text end

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 17.

Minnesota Statutes 2022, section 273.128, subdivision 2, is amended to read:

Subd. 2.

Application.

(a) Application for certification under this section must be filed
by March 31 of the levy year, or at a later date if the Housing Finance Agency deems
practicable. The application must be filed with the Housing Finance Agency, on a form
prescribed by the agency, and must contain the information required by the Housing Finance
Agency.

(b) Each application must include:

(1) the property tax identification number; and

(2) evidence that the property meets the requirements of deleted text begin subdivisiondeleted text end new text begin subdivisionsnew text end 1new text begin and
1anew text end .

(c) The Housing Finance Agency may charge an application fee approximately equal
to the costs of processing and reviewing the applications but not to exceed $10 per unit. If
imposed, the applicant must pay the application fee to the Housing Finance Agency. The
fee must be deposited in the housing development fund.

new text begin EFFECTIVE DATE.new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 18.

Minnesota Statutes 2022, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more units
and used or held for use by the owner or by the tenants or lessees of the owner as a residence
for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a
also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt
under section 272.02, and contiguous property used for hospital purposes, without regard
to whether the property has been platted or subdivided. The market value of class 4a property
has a classification rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units, including property rented as a
short-term rental property for more than 14 days in the preceding year, that does not qualify
as class 4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm
classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

For the purposes of this paragraph, "short-term rental property" means nonhomestead
residential real estate rented for periods of less than 30 consecutive days.

The market value of class 4b property has a classification rate of 1.25 percent.

(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property;

(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b); and

(3) a condominium-type storage unit having an individual property identification number
that is not used for a commercial purpose.

Class 4bb property has the same classification rates as class 1a property under subdivision
22.

Property that has been classified as seasonal residential recreational property at any time
during which it has been owned by the current owner or spouse of the current owner does
not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to commercial temporary and seasonal residential occupancy for recreation purposes,
for not more than 250 days in the year preceding the year of assessment. For purposes of
this clause, property is devoted to a commercial purpose on a specific day if any portion of
the property is used for residential occupancy, and a fee is charged for residential occupancy.
Class 4c property under this clause must contain three or more rental units. A "rental unit"
is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles. A camping pad offered
for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c
under this clause regardless of the term of the rental agreement, as long as the use of the
camping pad does not exceed 250 days. In order for a property to be classified under this
clause, either (i) the business located on the property must provide recreational activities,
at least 40 percent of the annual gross lodging receipts related to the property must be from
business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or (B) at least 20 percent of the annual gross receipts must be from charges for
providing recreational activities, or (ii) the business must contain 20 or fewer rental units,
and must be located in a township or a city with a population of 2,500 or less located outside
the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion
of a state trail administered by the Department of Natural Resources. For purposes of item
(i)(A), a paid booking of five or more nights shall be counted as two bookings. Class 4c
property also includes commercial use real property used exclusively for recreational
purposes in conjunction with other class 4c property classified under this clause and devoted
to temporary and seasonal residential occupancy for recreational purposes, up to a total of
two acres, provided the property is not devoted to commercial recreational use for more
than 250 days in the year preceding the year of assessment and is located within two miles
of the class 4c property with which it is used. In order for a property to qualify for
classification under this clause, the owner must submit a declaration to the assessor
designating the cabins or units occupied for 250 days or less in the year preceding the year
of assessment by January 15 of the assessment year. Those cabins or units and a proportionate
share of the land on which they are located must be designated class 4c under this clause
as otherwise provided. The remainder of the cabins or units and a proportionate share of
the land on which they are located will be designated as class 3a. The owner of property
desiring designation as class 4c property under this clause must provide guest registers or
other records demonstrating that the units for which class 4c designation is sought were not
occupied for more than 250 days in the year preceding the assessment if so requested. The
portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center
or meeting room, and (5) other nonresidential facility operated on a commercial basis not
directly related to temporary and seasonal residential occupancy for recreation purposes
does not qualify for class 4c. For the purposes of this paragraph, "recreational activities"
means renting ice fishing houses, boats and motors, snowmobiles, downhill or cross-country
ski equipment; providing marina services, launch services, or guide services; or selling bait
and fishing tackle;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or dues,
but a membership fee may not be required in order to use the property for golfing, and its
green fees for golfing must be comparable to green fees typically charged by municipal
courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with
the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a nonprofit
community service oriented organization and not used for residential purposes on either a
temporary or permanent basis, provided that:

(i) the property is not used for a revenue-producing activity for more than six days in
the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least equal
to the property's previous year's property taxes and the property is allowed to be used for
public and community meetings or events for no charge, as appropriate to the size of the
facility.

For purposes of this clause:

(A) "charitable contributions and donations" has the same meaning as lawful gambling
purposes under section 349.12, subdivision 25, excluding those purposes relating to the
payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The
use of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the requirement
under item (ii) must file an application by May 1 with the assessor for eligibility for the
current year's assessment. The commissioner shall prescribe a uniform application form
and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by a
nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding
manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as
defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision
3a, and (iii) class I manufactured home parks as defined in section 327C.015, subdivision
2;

(6) real property that is actively and exclusively devoted to indoor fitness, health, social,
recreational, and related uses, is owned and operated by a not-for-profit corporation, and is
located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased
premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be
filed by the new owner with the assessor of the county where the property is located within
60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under section
272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the ai

HF 1938A

Bill Text Versions

CONFERENCE COMMITTEE REPORT ON H. F. No. 1938

"ARTICLE 1

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Subdivision 1.

Definitions.

new text begin EFFECTIVE DATE.new text end

Sec. 2.

Subd. 2.

Tax credit for owners of agricultural assets.

new text begin EFFECTIVE DATE.new text end

Sec. 3.

Subd. 4.

Authority duties.

new text begin EFFECTIVE DATE.new text end

Sec. 4.

Subd. 6.

Report to legislature.

new text begin EFFECTIVE DATE.new text end

Sec. 5.

Subd. 7.

Sunset.

new text begin EFFECTIVE DATE.new text end

Sec. 6.

Subd. 5.

Credit allowed.

new text begin EFFECTIVE DATE.new text end

Sec. 7.

Subd. 12.

Sunset.

new text begin EFFECTIVE DATE.new text end

Sec. 8.

Subdivision 1.

Definitions.

new text begin EFFECTIVE DATE.new text end

Sec. 9.

Subd. 4.

Applications; allocations.

new text begin EFFECTIVE DATE.new text end

Sec. 10.

Subd. 7.

Expiration.

new text begin EFFECTIVE DATE.new text end

Sec. 11.

new text begin [181.141] SEXUAL HARASSMENT OR ABUSE SETTLEMENT; PAYMENT AS SEVERANCE OR WAGES PROHIBITED.new text end

new text begin EFFECTIVE DATE.new text end

Sec. 12.

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and beneficiaries.

new text begin EFFECTIVE DATE.new text end

Sec. 13.

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and beneficiaries.

new text begin EFFECTIVE DATE.new text end

Sec. 14.

Subd. 7a.

Pass-through entity tax.

new text begin EFFECTIVE DATE.new text end

Sec. 15.

Subd. 2.

Reporting and payment requirements for partnerships and tiered partners.

new text begin EFFECTIVE DATE.new text end

Sec. 16.

Subd. 19.

Net income.

new text begin EFFECTIVE DATE.new text end

Sec. 17.

Subd. 21a.

Adjusted gross income; federal adjusted gross income.

new text begin EFFECTIVE DATE.new text end

Sec. 18.

Subd. 2.

Deductions limited; inflation adjustment.

new text begin EFFECTIVE DATE.new text end

Sec. 19.

Subd. 5.

Deduction limited.

new text begin EFFECTIVE DATE.new text end

new text begin [181.141] SEXUAL HARASSMENT OR ABUSE SETTLEMENT; PAYMENT
AS SEVERANCE OR WAGES PROHIBITED.
new text end

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

Reporting and payment requirements for partnerships and tiered
partners.

new text begin [290.033] NET INVESTMENT INCOME TAX.
new text end

new text begin [290.0661] MINNESOTA CHILD TAX CREDIT.
new text end